Finding motivated sellers is arguably THE most important activity in a Real Estate business.
Thou who masters the art of working with motivated sellers wins.
If that is all that you get good at, you will have the best tool in the toolbox. Investors with cash are craving more deals.
Retail buyers are out there looking for bargains. Realtors could use your leads. There are a lot of benefits that will follow this “A” activity.
The first step in finding motivated sellers is to identify your product. Do you know what kind of property you are going after? Apartment buildings? Residential? Retail? Land?
Do you know what you are going to do with the deal after you have negotiated a contract with the motivated seller? Are you going to wholesale it to a cash buyer? Are you going to fix and flip it? Are you going to do master lease options?
Once you have this figured out then you can answer the next question…
Who are your prospects? If you are working multi family property, the best thing you can do is go down to the courthouse and ask the information clerk where the tax record computers are. Bring your laptop with an excel spreadsheet and record the name, property address, mailing address, and any other info you want to add into your database. Another option you have is to hire a list broker. If you “google” list broker and your area, you should identify a person who keeps lists like this for a living. They will sell you the list.
Lastly, if you have a little more cash, I would recommend http://www.prospectnow.com. They keep records of commercial real estate owners all around the country. Not only will you get the mailing address but you will also get their phone number.
Once you know who your prospects are and you have a list of addresses, send them a yellow letter. You know those yellow legal pads that look like looseleaf paper?
Grab one of those and write a really simple message and personalize it to the owner.
My wife and I live in the area and we are very interested in purchasing your property at _______________. We invest in apartment buildings in ______ (town). We are very serious and highly qualified. Please call me now at ____________ to discuss the sale of your building.
This letter works very well because the owner knows that you are not a bulk mail solicitor. They get a lot of mail and offers from investors and all kinds of businesses. Make sure to use a self-addressed, hand-stamped envelope so that they open it.
Another letter you can use if you are looking to be a little more professional or you have an auto-fill system in your database is my income property letter. Click here to see my letter.
The last option you have that I would recommend is to send postcards to your list. You can get them for about 60 cents a piece at http://www.click2mail.com . I have used this service quite a bit and they are very good with customer service. There are cheaper alternatives but they are not as reliable.
Once you have sent out your mailers, your phone should start ringing within a few days. If you sent out 100, don’t expect much but if you sent out 1,000 or more, you will be getting calls. The typical response rate in the industry is 1%. If you send out 1,000 letters you should get 10 calls or so. In my experience, I will usually get about 20 calls for every 1,000 letters, so a 2% response rate. I have heard of some campaigns getting over 10%. I think that is because they made some kind of promise or offered something valuable for free.
If you stick with this formula, you will get calls and you will be finding motivated sellers.