George and I sat on the porch for a long while before he spoke up about his reason for dropping by. Since buying his first investment property, he hadn’t been terribly successful at generating more leads that convert to sales. He’d gotten close to landing a few good deals but was ultimately outbid by other investors who’d found the same leads. Feeling a bit downtrodden but not yet ready to give up, he wanted to speak to me. I’ve been successfully investing in real estate as a business for years and he wanted to know, quite simply, how I did it. To start, I told him, you have to have one or more lead generation strategies that work around the clock to help you find motivated sellers now and for as long as you have your business. And, if he was willing to hang a while longer, I’d go over a few options with him.
How to Find Motivated Sellers Now and in the Future
I buy single-family homes as investment property, renovate them, then sell them for a fairly decent return. And, because I have a great way to find motivated home sellers on an ongoing basis, I’m able to make a very good business out of flipping houses. A lot of real estate investors, however, spend time scouring the Multiple Listing Service (MLS), attending foreclosure auctions, or applying for properties sold through land banks and forfeiture programs. I find those tactics trying at best and a waste of time at worst. Eventually, most investors come to feel the same. It’s just easier to build your business by dealing directly with distressed homeowners who want to sell fast—if you can find them.
Fortunately, there are ways to find motivated sellers and, thus, improve your odds of landing more deals. Here are the options George and I chatted about.
Buy Targeted Lead Lists
Lead lists are a very popular tool for finding homeowners in distressing situations that usually make them highly motivated to sell. These situations run the gamut from expired MLS listings to foreclosure filings, bankruptcy, and divorce. While you previously had to purchase these lists directly from real estate agents, you can now buy them online from several different companies that let you customize the parameters of your search. Unfortunately, this strategy is very popular—which is exactly why it’s also problematic. The likelihood that every homeowner on a list has been contacted by other investors like you is high, making your chances of winning them over low. Lead lists also tend to be out-of-date, spurring potentially awkward conversations with the homeowners you’re trying to help.
Check Legal Notices on Government Websites
Most county government websites publish legal notices about homes that have fallen into pre-foreclosure status, although you can check with national agencies, like HUD, too. The benefit of this strategy is that, rather than trying to buy a foreclosure auction home after-the-fact, you can potentially get your hands on a house when a homeowner has simply been notified that they’re behind on their payments. They’re likely going to be motivated to sell and you’re better positioned to buy a property at a good price without having to deal with an auction.
But, you’ll quickly realize that it takes a lot of time and patience to navigate most government websites and you won’t be the only investor trying to get the hang of it. The probability that the effort you put into your searches will pay off with enough deals to make it all worth it isn’t great either. When you find a property you like, for example, you’ll have to track it through the foreclosure pipeline to see if it actually gets seized and goes up for sale. And, since there’s always the chance that a homeowner will get current on their loan or be granted a forbearance, you could get your hopes up about a house you’ve spent months tracking that, ultimately, gets to stay with its owner.
Take a Drive Around the Neighborhood
It’s a bit old school, but driving through the neighborhoods where you’d like to invest isn’t a bad way to find distressed properties whose owners might want to sell. These homes are fairly easy to spot too. Just look for things like overgrown lawns, ramshackled roofs, cracked driveways, and old or aging paint jobs—all signs that the homeowner can’t, or doesn’t want to, care for the home. If you come across boarded windows or mail spilling out of the mailbox, it’s possible the owner has abandoned the property altogether.
If you take this route, however, you will be faced with how to handle the situation delicately so as not to scare or anger the homeowner when you approach them about buying the house. Of course, this is assuming you can successfully connect with the owner to begin with since they may not live at the property, may be ill, or even be deceased. With the amount of time it’ll take you to pound the proverbial pavement to find potentially good investment properties anyway, you’re probably better off looking for a way to drive the owners of these kinds of properties to you.
Market Your Business
It can be tough, not to mention expensive, to do when you’re trying to build your business with tight funds, but advertising is one of the more powerful ways to generate motivated home seller leads. If you can create a memorable name for your real estate investing business, build a reputable brand around it, and market to your target audience in as many ways as possible, you might find that motivated sellers find you. Talk about an efficient method for generating more leads with the highest potential to convert! But, you will pay for it—a lot, in fact. While DIY marketing strategies could save you a buck or two in the short run, they’ll still cost you a pretty penny in the long run since it can take a while to build a successful campaign from scratch. In the end, you might want those funds to help you buy a house to renovate and sell.
Each of these options will certainly connect you with motivated home sellers from time-to-time, but whether they will help you land enough deals to build a business on is questionable. You’ll likely have to implement most or all of them to better your chances of making a career out of real estate investing and, even then, you could end up just spinning your wheels.
So, where does that leave you? Well, it actually leaves you with the most effective way to generate leads on distressed homes.
The Most Effective Way to Connect With Motivated Sellers
There was a time when I was just as despondent about the future of my real estate investing career as George was that day on the porch. My luck was slightly better than George’s—I had a handful of good deals under my belt—but I wasn’t anywhere near where I needed to be to make a full-time living out of professional real estate investing. Intuitively, I knew I needed a strong strategy to find distressed homeowners who were motivated to sell and I wanted something more effective than what my fellow investors were doing. But, my choices seemed pretty limited.
That all changed when I chose to become an independently owned and operated HomeVestors® franchisee. Thanks to the “We Buy Ugly Houses®” national ad campaign, which you’ve probably seen on billboards, online, and on TV, motivated home sellers now come to me. I no longer have to solely depend on the MLS, lead lists, dig leads, or any other lead-generating tactics that can challenge the nerves and, often, may just leads to a dead end. All I have to do now is follow through on the calls that come my way and do my best to help the homeowners who’ve reached out to me.
Find motivated home sellers now by joining the team that helps them find you. Call HomeVestors® about your franchise options today!
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