My friends Shane and Nate hit me up for some advice the other day on how to find motivated home seller leads. They’re both real estate investors, like me, but neither has been doing it as long as I have. Shane just started flipping houses and Nate has been doing it for a few years. Me? I’ve been investing for a couple of decades. So, I know all the options for finding distressed homes that I can rehab for good returns and have tried most, if not all, of them.
I took the time to chat with both guys about what they’d been doing to get motivated home seller leads and how effective their strategies were. And, quite honestly, their options weren’t bad. You may have even tried a few yourself.
But, one thing that stood out to me is that they both were missing a key ingredient in their lead generation strategies. There’s a new option out there that anyone can use, whether you’re investing in property for the very first time or you’re a seasoned pro. I want to offer you the same advice I gave to my two friends: actively seeking out leads is great, but if you really want to up your game, you should get those leads to come to you. Here’s how I made that happen.
What You’re Probably Already Trying (And Why It’s Not Working)
Sourcing leads on motivated home sellers is something every investor needs to learn how to do early on. It’s Real Estate Investing 101, if you will. The reason for this, obviously, is that without a way to find great investment properties, you don’t have a way to make even a decent living in real estate investing. There are several places to look for distressed properties to buy and renovate to sell or rent out, like auctions or through government agencies. But, homeowners who need to sell fast will likely give you better deals that are easier to acquire.
This is where I recommend most investors start. That said, the biggest mistake I see investors make is that they only focus on actively courting homeowners and tracking down leads. It’s true that you can find promising leads from the list of options below, but if you find your motivated home seller leads drying up, you’ll need a better option.
Here are some of the methods you may have already tried and a few reasons why they didn’t get you the results you were looking for. Later, I’ll show you how to turn this around and get these leads to come to you.
Option 1: Canvas the Neighborhood
Whether you decide to pound the pavement or drive for dollars—or both—canvassing up-and-coming neighborhoods can lead you to some great fixer-uppers. Broken and boarded windows, overgrown lawns, the presence of weeds in the driveway, and the absence of electricity are signs that a property owner is in financial distress or may have abandoned the house.
| Pros | Cons |
| You can find hidden gems not listed in any official lead generation sources | It’s time-consuming and requires a ton of legwork (sometimes literally) |
| You can scope out the neighborhood to avoid buying white elephants, like homes near railroads | You have to track down the homeowner’s contact information—a problem if the property is abandoned |
| It isn’t always easy getting on the homeowner’s good side, especially when they learn how hard you worked to find their “ugly” house |
⇨ Why This Option May Not Have Worked for You
This is a real estate investor’s version of cold-calling. It’s a numbers game. For this option to be effective, you have to commit to visiting new neighborhoods as often as you can and make sure you follow up with potential leads fast, before your competition catches on. You also have to convince the homeowner to get on board, and if they’re not interested in selling, then you’ll have wasted your time. This option can work, it’s just by no means foolproof or without risk.
Option 2: Purchase Lead Lists
You can purchase lead lists from real estate agents or from a variety of third-party vendors online. These lists include everything from foreclosure starts to expired listings, as well as information on divorce filings, deaths, and vacant or abandoned homes. In fact, you can buy lists for just about any scenario that indicates a homeowner is in trouble and motivated to sell.
| Pros | Cons |
| You don’t have to hunt down properties or homeowner information yourself | Other real estate investors know about these too, so the secret is out and competition is fierce |
| You can buy the lists specific to the type of properties you’re looking to invest in | Homeowners usually get contacted by just about every investor in town, so they may be sick of the intrusions |
| When leads dry up, you can simply buy another list and start the process over again | If homeowners feel their property is in high demand, they might up the asking price |
| The lists aren’t always up to date | |
| Buying lists over and over again can get expensive and tedious |
⇨ Why This Option May Not Have Worked for You
I’ve known investors who have successfully found motivated home seller leads through these lists, but they’re few and far between. Most of the time the good properties get gobbled up by full-time investment companies with secure funding and fast negotiation skills. You shouldn’t feel deflated if these lists haven’t worked for you—they’re a gamble even for the most experienced of us. Thankfully there are many alternatives to lead lists out there.
Option 3: Search Legal Notices
A quick search online for legal notices on homes in pre-foreclosure can help you find motivated sellers. You can find these notices published on most county government websites and with agencies like HUD. They include homeowners who are behind on their mortgage payments and/ or have been served a Notice of Default or Lis Pendens. These homeowners are on the brink of foreclosure and may want to get out of their loans before getting a foreclosure on their record.
| Pros | Cons |
| There’s may be less competition on these properties compared to those in lead lists | You’ll have to do some heavy lifting to find these legal notices in the first place |
| You can potentially negotiate a fair deal with homeowners that benefits both of you | The legal status of these houses can change—quick! |
| Be ready to untangle a ton of legal red tape |
⇨ Why This Option May Not Have Worked for You
In my opinion, it’s too much work for too few chances to find a property to buy and renovate. It requires more effort than buying lead lists and the amount of information on properties you can find on government websites is usually extremely low. Don’t be surprised if this option hasn’t helped you find motivated home seller leads yet. It’s one of the toughest options out there.
Option 4: Advertise
There are so many ways to advertise these days and, by doing so, you create brand awareness and, ideally, a trusted household name. If you know where, when, and how to market to distressed homeowners, they may get just as eager to sell to you as you are to buy from them. You can even focus your marketing strategy on specific websites, like Facebook or Craigslist.
| Pros | Cons |
| Motivated home sellers will find and call you, not the other way around | Advertising is expensive |
| You’ll save time chasing leads from homeowners that aren’t actually interested in selling | Unless you have a marketing degree, knowing which real estate investing marketing ideas will pay off can be a crapshoot |
| You can build a solid reputation and a vast network to support you | You have to keep putting your name out there—and buying more expensive ads to do it |
⇨ Why This Option May Not Have Worked for You
Honestly, the amount of money you’ll have to spend to repeatedly get your name out there so that you can get the attention of homeowners could drain your cash and therefore, the ability to build your business. Even if you’re a marketing guru who can do it all yourself on the cheap, there’s no guarantee that homeowners are seeing your ads. This option is great in theory, but doesn’t often live up to the hype in practice.
What Can You Do Instead?
There are a number of ways that are touted as the best for finding fixer-upper or pre-foreclosure homes for sale, including the options listed here. If you’re an expert investor, you already know that these strategies alone don’t always work well enough to keep your business going. You’ve probably had to implement several. If you’re just starting out in real estate investing, you might be overwhelmed by your options and want to cut to the chase so that you’re not chasing bad leads. I’ve got a solution for you and, in my opinion, it’s the best option available.
A New Option for Finding Motivated Home Seller Leads
As I said, I’ve been around the real estate investing block a few times. Early on, I knew that finding homeowners who want to sell was key to buying good deals. I later discovered that getting those homeowners to come to you is even better. Of course, that takes a lead generation strategy that incorporates effective marketing tools with solid branding so that homeowners know who to call when it’s time to sell—something I didn’t have.
Then, I became an independently owned and operated HomeVestors® franchisee. Now, I benefit from nationally-known “We Buy Ugly Houses®” marketing on television, radio, and print advertising campaign. It’s the brand that distressed homeowners across the nation have come to know and trust, which helps to turn those homeowners into motivated sellers. It takes the mystery, and the hassle, out of finding leads and gives me the option to help homeowners who are in an “ugly” situation.
If you’re not getting the qualified leads that you need, try something new. Contact HomeVestors® to learn more about how motivated sellers can find you, too.
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