Can You Take A Minute and Explain What Motivated Sellers Are?

You here it from all of the gurus…”Find motivated sellers and they will give you their house.” You say: “That’s great! Now what is a motivated seller again? And once I find one, then what???”

Motivated sellers are the best kind to deal with, because helping them solve their issues only leads to your success. Don’t let the fact that you are currently experiencing some issues with money (or lack thereof) deter you from going after these sellers. Your primary concern is negotiating creatively (isn’t necessity the mother of invention?) and positive thinking.

Be a problem solver! Work on a “win/win” basis!

People often hear me say this is NOT a transactional business. Yes, the numbers have to ultimately work for you but this business is about problem solving plain and simple. A “motivated seller” is experiencing some sort of pain from their property. I tell people who work with me that individuals who come to us either have a “people problem” (divorce, job loss, etc) or are experiencing a “house problem” (inherited the house, house is such disrepair that they can’t afford to fix it or don’t know where to start).

Creative negotiating is king!

Your only job is to find a creative solution that will benefit both sides! You do that by working in a manner that will help them solve their problem, knowing that at the end, you are probably (but not always) their best option. Listen to what their needs are and find a way to get them that. Can you do that every time? No. Just remember that, negotiations must be two sided in order for you to be successful. Also keep in mind that price isn’t the only thing that is negotiable. Terms may be important. Perhaps they need help moving or finding a place for their pets. Listen and when you want to talk, listen some more.

Find out what the seller wants!

Some homeowners just want out. Their payments have overwhelmed them. Other sellers will want a steady income and don’t need front money in the form of a down payment. Most buyers never consider asking a seller what they want! Find out what the seller really wants! How? By asking and listening!

So now I know what the seller wants. Now how do I present that?

If you listened to the seller and found out what their needs are, there is no end to the creativity of what you can offer them. Some buying options might include any one or combination of the following:

1. It could be as simple as simply taking over their current mortgage.
2. Giving some up front cash and taking over existing mortgage.
3. Seller financing.
4. Cash down with seller providing you with a second mortgage (which might represent their profit.
5. Lease with option to purchase.
   

There simply is no end to creativity. I have several homeowners who actually PAY ME TO OWN THEIR HOUSE! Yes, you heard me right. I receive anywhere from $250 - $450 a month from the owner for me to own their house! Why would they do that? Because I heard what they needed and provided a solution that may not eliminate all of their pain, but substantially “dulled” it.

That is why I said earlier your lack of money is not an issue. Your ability to solve their problem is. And once you have it under contract, if the deal is good, the money will be there. If you don’t have it, contact me.

John Panico is the author of this article. John is an active investor of properties throughout NE Georgia. He is the General Manager of Local Guys Equities, LLC, one of the fastest growing real estate investment companies in Georgia. John founded the NE GA Real Estate Buying & Investing Group and wholesales properties to real estate investors around the country. Feel free to contact John about selling your house or other information.

Keywords: motivated sellers, real estate investing

Can You Take A Minute and Tell Me How To Build A Buyer's List?

I got some emails regarding my "Tell Me About Wholesaling" article. Most people got the concept. But they wanted to know how to build a "buyers list"

A buyers list is comprised of real estate investors you can contact when you have a deal that you want to sell. It may be an assignment of contract or it may be a house you own and for a variety of reasons want to sell.

How many people should be on your buyers list?

Let me just say you can never have too many!

Different investors have different appetites for buying from you. Rehabbers for example may only buy 3-4 houses a year. In the interim, they are busy doing the work, anticipating their profit. Other investors may be just adding a house here and there to their portfolio. When you take into consideration other criteria such as price range, area, single family vs. multi-family and you can see why your list needs to be constantly growing. You want your list large enough to sell any house you put out to the list to be under contract within 7-10 days. If your list isn’t performing that well, keep building your list.

What Type of Buyers Will Appear on My Buyers List?

1. Owner Occupants - You will make your largest profit per deal but keep in mind that you will only be selling them one house. So keep building your list!
2. Investor/Rehabbers – As mentioned above, they will buy, rehab and sell. They need you because they know and understand what they do best, and doing the marketing to find houses usually isn’t their strong suit.
3. Investor/Landlords - You will make the easiest and most money with these people. They are looking for the cash flow and long-term appreciation, not the quick profit.
   

Of the above, I will do what I can for Landlord Investor. If they want a property rehabbed with tenants already in there paying, then I will accommodate them. In return, I will get paid well for my efforts

So, you understand you need to either build or expand your buyers list. The big question I get all the time is how do you do that? This list is certainly not all inclusive, but the sources here have all been fruitful to me:

• Your local real estate investment group – fellow investors congregated in the same area are a great source of potential buyers. Talk with the local group administrator about getting a table before 1 of the meetings. Show your target marketing areas and types of houses that you acquire regularly. I usually create a list by taking a business card and offering up a drawing with a prize like an iPod. Depending on the size of your group, it may take just 3-6 meetings to build a list of 500-750.
• We Buy House signs – These folks are always looking for product. If you have a good deal, most investors don’t mind that you make some money for your efforts. Call them and find out their criteria.
• Search in the local newspapers for the "We Buy Houses" ads.
• Look for billboards or signs around town that say "We Buy Houses." Homevestors and Buy Kwik advertise heavily where they have franchisees on billboards.
• You will see bandit signs on telephone poles and other places, call them all, and get info on them.
• There are many traditional landlords looking for good deals on properties and happy to buy your great deal. Look in For Rent Section of your local newspaper. Collect names and information about investors who buy houses.
• Go to real estate auctions, not to bid, but to meet the investors that are bidding. Some investors prefer to buy at the foreclosure auction as they don’t like to deal with owners. At most auctions, the property must be paid for with cash or a cashier's check within hours of the sale so you know these buyers can close very quickly, so it is a great place for you to meet cash buyers for your houses. Keep good telephone logs. Once word gets around that you find good deals, you will get weekly phone calls from investors checking if you have anything. Keep record of who calls; these are the first investors you need to contact when you have a deal.
• I have run newspaper ads and also posted in places like Craig’s List letting folks know that I have properties available at a great price. I always get a response and add it to my list.
  

Keep good telephone logs. Once word gets around that you find good deals, you will get weekly phone calls from investors checking if you have anything. Keep record of who calls; these are the first investors you need to contact when you have a deal.

John Panico is the author of this article. John is an active investor of properties throughout NE Georgia. He is the General Manager of Local Guys Equities, LLC, one of the fastest growing real estate investment companies in Georgia. John founded the NE GA Real Estate Buying & Investing Group and wholesales properties to real estate investors around the country. Feel free to contact John about selling your house or other information.

Keywords: buyers list, rehabers, real estate investing

Can You Take A Minute and Tell Me About Wholesaling Real Estate?

Wholesaling real estate is a great way to make more than just a good living. For a variety of reasons, many real estate investors do not purchase properties directly from the former homeowner. I think you would be surprised by how many real estate investors that actually buy their properties through the wholesale process. At the very least wholesaling should be a part of every real estate investor’s arsenal. Don’t let a deal that you have worked hard to get pass you by profit wise because it doesn’t fit your criteria. Make money by wholesaling regularly.

The act or art (depending on who you talk to) of doing a wholesale real estate deal comes in two different flavors. But before we dive into that, let’s make sure we are all talking the same language. If you have heard or used expressions such as flipping, selling to investors, assigning a contract, rehab buyers, purchasers of fixers, etc., you are essentially talking about wholesaling a property. Simply put, wholesaling occurs when someone either buys or puts a property under contract and then sells it to another investor. The best profit opportunities come when a wholesaler puts a property under contract and then sells that contract to another investor before they actually have to come out of pocket with their own money or through the necessity of actually closing the transaction themselves.

Wholesalers generate their real estate income opportunities by finding motivated sellers, fixer-uppers, pre-foreclosures, bank owned properties and usually put it under contract (flavor 1). In some cases, they actually will purchase the property (flavor 2) because they have purchased the property for such a large discount, that the end investor won’t be making as much as the wholesaler. They then contact their “buyers list” of investors and sell them the rights to that contract by assigning the original contract to the investor.

Don’t get caught up in what the gurus tell you, finding properties from motivated sellers takes work. And they are compensated well for their efforts. Wholesalers typically make $5,000 - $10,000 per transaction. I have seen that figure go much higher though. Wholesalers deal in volume! Instead of making big profits from the sale of one house, a good wholesaler is willing to make moderate profits from many properties. They know and understand that the investor that is purchasing the property from them is likely to make more money, but they also don’t have the same risk level and so the compensation is reasonable to them.

A wholesaler’s ability to know market conditions in and around his or her area is critical. And they should also have some understanding of negotiating. Remember you aren’t just negotiating a great deal for yourself. You have to remember to insure that their will be adequate profit for the investor purchasing the property from you. Most rehabbers will want to earn at least a dollar of profit for every dollar they invest.

Among some real estate investors, wholesaling is viewed right next to used car salesman. That is because some wholesalers inflate ARV’s, underestimate rehab costs and take advantage of new investors in the market place. Let’s be clear there is no place for these types of individuals. And for the most part, those folks aren’t in the business that long. Real estate agents can also take an adversarial position because wholesalers act in the same manner as they do, but with far fewer constraints.

That being said, a reputable real estate wholesaler always has a steady supply of customers. Why such a different view? Great wholesalers develop a reputation for their approach for the comps they use (within a half a mile), repair estimates (legitimate, but not all knowing because you never know what you might uncover) and profit opportunity being close to reality.

You can find more information regarding wholesale real estate through your local real estate investment group, or find out the word on the internet by accessing one of the many real estate investment blogs.

John Panico is the author of this article. John is an active investor of properties throughout NE Georgia. He is the General Manager of Local Guys Equities, LLC, one of the fastest growing real estate investment companies in Georgia. John founded the NE GA Real Estate Buying & Investing Group and wholesales properties to real estate investors around the country. Feel free to contact John about selling your house or other information.