As the real estate market continues to climb and more and more investors come into the market finding deals gets a little tough. That doesn’t mean they are not out there though!
NOTE: This is a repost of something I wrote a year ago, when people were already saying deals were hard to come by. That environment has not changed. You need to get creative sometimes or find “problems” you can resolve buy acquiring property.
The below are a few suggestions….
3 Ways to Find Potential Sellers
1.) Buying Pre-Auction
Just because a home is set to be auctioned doesn’t mean that it has to be. You can look at county auction sites or even sites like auction.com who list properties that are set to be auctioned by counties (this is in addition to the properties they are auctioning off). By doing this you can see properties that are set to be auctioned off in a few weeks.
With a little research you can find the owner of the property and contact them to see what the situation is and suggest some options that are beneficial to both parties.
Options such as:
- Doing a short sale
- Assuming the mortgage (if allowed)
If the seller is agreeable to it, you can call the bank and ask if you can ask if a short sale is possible. If they are willing to accept a short sale package you can get a lawyer to file a judgement to delay the auction which will allow time to negotiate the short sale and potentially by the property for less than what is owned on it.
The main thing is to find properties going to auction that have a loan balance less than the fair market value of the home. They are out there – I know first hand as I was just working one of these deals.
2.) Vacant Properties
Properties can be vacant for myriad of reasons. Some of those reasons are landlords that have given up, owners who have passed away, etc. Reaching out to the controlling interest of the property is worth the letter or phone call to atleast see if the property is available for sale.
The times you do find a seller you can usually negotiate a good price because the owner or those inheriting it don’t want to deal with getting the property back up and running.
3.) For Sale by Owner (FSBO)
Many think these are properties that can’t be had for a good deal. FSBO don’t even want to pay a real estate agent why would they sell for even a reasonable price.
It’s all about motivation, plus the money they are saving by not paying a real estate agent is a tool for you to use when negotiating. If a home needs some work before it’s worth market value you can share this with the owner and show them that is why you can only offer the price you gave. Again, they get to save thousands not paying a real estate agent, money they keep in their pocket selling to you.
If it were easy everyone would do it
Real estate can be lucrative and build passive wealth for sure, but you still need to put in a little work to find deals.
When you do find them, make sure you run numbers and “Buy Right” as I always like to say!