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6 Quick Ways To Find Motivated Sellers

how to find motivated sellers

You may love the business of investing…

… but finding an income property with potential may not be something you look forward to.

Some investors find themselves considering 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.

That’s a shame.

Because 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 will you find numerous investment properties ripe for the picking, but you’ll also find sellers willing accept terms that are downright incredible.

What is a motivated seller?

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 as quickly as possible. 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, are willing to accept less on the property.

There are two types of 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.

As you can imagine, both are pretty attractive for serious investors.

So how do you find motivated sellers? Well, it’s simpler than you think. All it takes is a little ingenuity.

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

Every county has a goldmine 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. It’s too easy to spend thousands of dollars and wasting a lot of time on a direct mail campaign only to discover that a good 20% were no-go addresses.

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

Many commercial real estate investors prefer to invest in properties out of state in addition to those in their home town. And 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 factors that may affect the value of the income property.

Then there are the 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 its located in, and the market.

Long-term property owners

Property owners who’ve owned a property for more than ten years – especially if they’ve already been paid off, are 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 can get free from the responsibility of managing

Property owners with delinquent taxes

Property owners who owe taxes are literally 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 to the city.

Obviously you’ll have to take care of the taxes once you purchase it, but owners will be 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

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

If you’re considering multifamily 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, poor 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

SearchTempest.com is a search aggregator for Craigslist.

That 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 it works. First select “housing” under categories. Then choose “for sale – by owner” as your sub-category. Choose “business” as an additional sub-category. In the search bar itself, you can use multiple keywords to find properties.

Try “housing” “multi-unit” or “commercial real  estate.” You can choose to search an area based on the zip code, the entire city, or choose from several cities at once.

 

The easiest way to get in touch with 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’ll have to kiss a lot of geese before you find the deal that is absolutely perfect for you. Remember, you don’t want to settle for a so-so deal; ten or fifteen great deals will outperform 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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