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6 Quick Ways To Find Motivated Sellers

six quick ways to find property owners

You may be fond of investing, but finding an income property with potential may not be something you look forward to.

Some investors find less-than-ideal properties, just so they can avoid the hassle of trying to find a motivated seller. Unfortunately, this means that not only do they miss out on some great deals, but they also limit themselves to the same list of properties available to every other investor out there.

Instead of snapping up distressed properties with plenty of room for adding value, these investors end up paying far too much money for run-of-the-mill properties that do nothing for their portfolios – or their pocketbooks.

Contrary to popular belief, it is possible to find sellers who can’t wait to get a property off their hands. With the right method, not only can you find numerous investment properties ripe for the picking, but you’ll also find sellers willing to accept terms that are downright incredible.

What is a motivated seller?

how to find motivated property owners

Every seller – regardless of what they’re selling – has a specific motivation for selling a particular item at a particular price. Uncovering the underlying reason for selling the property should come even before you do any due diligence on the property.

In commercial real estate, the term “motivated seller” means that the seller is not only interested in selling the property, but that they need to sell their investment quickly. They don’t have the time, patience or money to wait for a buyer that fits their exact requirements, and in exchange for a quick sale, they are willing to accept less on the property.

Finding motivated sellers-price

There are two ways motivated sellers tend to be flexible:

  • One is on price – i.e they are willing to accept a drastically lower price – sometimes as much as 10% – 30% of market value – in exchange for a quick sale.
  • Motivated sellers can also be more flexible in the terms they offer you. For example, they might be willing to finance the property for you, accept no money down, or forego interest.

Both are pretty attractive for serious investors.

How do you find motivated sellers?

Finding motivated sellers-Westwood

Well, it’s more simple than you think. All it takes is a little ingenuity.

  • Get a list straight from the county you’re interested in

Counties have goldmines of available properties; specifically, in the form of their delinquent tax list. Every county has one, and the information on the list is both accurate and up-to-date (which is critical).

On the other hand, working with counties can be quite difficult. While some cities make the process of sorting and organizing the list fairly simple, others make you fight your way through a labyrinth of red tape in order to get the information you need.

The other option is to have a data company compile a list for you. The price may vary, with some companies offering you the chance to try out a list by purchasing a small percentage of the actual list. This allows you to test the list first for accuracy and responsiveness before spending thousands of dollars on a dead or unengaged list.

While all the owners on the list might be potential prospects, there are three categories of owners you should be on the lookout for.

  • Out-of-state property owners

Finding motivated sellers out-of-state properties

Many commercial real estate investors prefer to invest in properties out of state in addition to those in their home state. While this often gives investors a wider selection of prime properties to choose from, it also means these owners will be less involved and less aware of the factors that may affect the value of the income property.

There are also owners who did live in the area but had to move out of state, leaving them disconnected from the day-to-day affairs of the property, the neighborhood in which it is located, and the market.

  • Long-term property owners

multi family properties

Property owners who’ve owned a property for more than ten years – especially if they’ve already been paid off, present prime opportunities for investors.

If there is some equity in the property and owners are tired of the hassle of running the property, they’re more likely to take what they can get as long as they are released from management responsibilities.

  • Property owners with delinquent taxes

Finding motivated sellers- deliqent taxes

Property owners who owe taxes are often at their wit’s end. They don’t have the time or the money to wait for the perfect offer since, if they can’t sell their property, they risk losing it all.

Obviously, you’ll have to take care of the taxes once you purchase it, but owners are often thrilled to wipe the slate clean and get a fresh start without ruining their credit history.

  • Keep an eye out for vacant properties, or properties not being used for their highest and best use

Vacant properties-finding motivated sellers

If the market in your area is favorable for commercial real estate (there are numerous types of a commercial real estate so at least ONE type should be feasible). A drive through the area you’re interested in might yield prospects.

If you’re considering multi family properties, look for those that are run-down, but located in a decent neighborhood with good demand. Often these only need some small renovations, exterior painting, and new appliances in order to increase their equity – things that the owner is either unaware of, or unwilling to consider.

If you’ve got your heart set on retail or office properties, several slow drives around potential neighborhoods might yield potential properties that are right up your alley. Look for signs of neglected maintenance, poor landscaping, or (if you can get in the building), poorly designed floor plans.

Again, if these are located in high-demand areas, there will plenty of potential for finding the best and highest-use for a property that will add equity to the property and profits to your portfolio.

  • Use SearchTempest.com, a free Craigslist aggregator

finding motivated sellers-searchtempest

SearchTempest.com is a search aggregator for Craigslist.

This means that, in just a few seconds, you can get a list of all the FSBO apartment buildings offered throughout the U.S. on Craiglist for free.

Here’s how the aggregator works:

  1. First select “housing” under categories.
  2. Then choose “for sale – by owner” as your sub-category.
  3. Choose “business” as an additional sub-category. In the search bar itself, you can use multiple keywords to find properties.
  4. Try “housing” “multi-unit” or “commercial real estate.” You can choose to search an area based on the zip code, the entire city, or you choose from several cities at once.

The easiest way to get in touch with property owners is to text them; according to other investors, texting has a higher response rate than email or voice calls.

Keep in mind that not every property will turn out to be “the one.” You might have to do a significant amount of digging before you find the deal that is right for you. Remember, you don’t want to settle for a so-so deal; ten or fifteen great deals will outperform a hundred okay ones. It’s a numbers game but it’s one you can win.

Interested in selling or purchasing a commercial real estate property?

Click here to schedule a free 15-minute strategy session to discover how to create wealth through low-risk property investments.

 

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Tags: commercial income properties, commercial property sellers, commercial real estate, Commercial Real Estate Investment, commercial real estate investor, due diligence, multi-family properties, real estate taxes