By Shawn Mandan — Real estate investing can be very lucrative, especially when dealing with “Motivated Sellers.” A consistent flow of motivated seller leads is the single biggest factor for real estate investing business success. Working with motivated sellers opens you up to more creative investing possibilities, increases the number of real estate investment deals you do, and keeps more money in your pocket in terms of up-front costs and profit potential. Year in and year out, absentee landlords, probate estates and other types of motivated sellers are looking to sell their properties outside the currents of the conventional real estate cycle.
Are you prepared to answer their call?
Landlords get unwelcomed calls about broken dishwashers or have to deal with being thousands of miles away from a tenant who has depreciated the value of their property. It’s not a good thing and everyone has a threshold of what they can withstand. Each county maintains a list of section 8 landlords … not a bad place to start.
This type of seller is disconnected and disengaged with the property for whatever reason and are looking to unload it because they’re still paying property taxes and managing upkeep. Look for empty homes, unkept yards, newspapers piling up, etc.
A seller facing foreclosure or delinquent taxes can be an incredibly difficult time for a homeowner. They’re possibly facing rock bottom and need to sell their property quickly or they completely lose it.
High equity owners
This type of seller has owned the property for more than 10 years or own the home free and clear. This type of seller has more equity and more freedom to sell at a discounted rate. However, they may also expect to receive full value of the property.
A home in probate can be a challenge mainly because it’s difficult to know whether a house is in probate or not just by looking at it. Sometimes you can locate probate properties by going through the obituaries in the local paper. It’s almost impossible to know whether a house is probate property or not when you look at real estate listings so you have to do a little more research. One place you can find probate properties is by going through obituaries in your local newspaper. If you have some money to spend, you can buy information from private companies regarding available probate property. if none of these methods.
Unfortunately, like every other part of real estate investing, probate comes with certain disadvantages as well. If you are planning on purchasing the property through a probate court, you might have to wait several months. This is because probate court processes last for several months. If the deceased person did not leave a will, the process could take even longer; years even. So if you are hoping to purchase property fast, probate property might not be for you.
Purchasing a distressed property can be a way to find the perfect home, fix and flip, or for rental income. Some of these homes are ready for immediate occupancy while others may take a considerable amount of sweat equity and remodeling before anyone will be able to move in.
You may be able to get a deal on a distressed property if you use the due diligence required to buy any home and make a sound purchase. Buying disclosed property can be risky business and you need to go into it with your eyes wide open, knowing the benefits and risks of buying a foreclosure, pre-foreclosure, or short sale.
No matter which type of seller you want to target, find out as much as you can about the property before you decide that you truly want it. One of the things that you should find out is if the house has any debt attached to it. The last thing you want is to wait several months only to find out that the house has an existing mortgage or back taxes which you will have to pay off.