7 Motivated Seller Lists Every Real Estate Investor Needs
In order to have a profitable and successful real estate investing business, it’s critical to have a consistent flow of motivated seller leads. Without those leads continually coming in, you might as well say you're out of business.
We’re currently in a seller’s market, which means we cannot rely on simply making offers on bank-owned properties in the multiple listing service (MLS). In order to be a successful real estate investor in a seller’s market, you need to have a marketing plan and strategy that targets houses not in the MLS (also known as off-market houses).
To do this, you can utilize traditional direct mail campaigns. I’ve been a full-time real estate investor since 2003, and I’ve discovered that many property owners haven’t seriously considered selling their property prior to receiving a strong direct mail marketing piece.
In this article, I’m covering the top seven lists of owners to target. I have targeted these exact lists over the years in my direct mail campaigns, and I let them know I’m interested in buying their property.
No. 1: Out-of-State Owners
I’ve previously tested mailing to in-state and out-of-state absentee owners, and found the out-of-state owners convert into sellers easier than in-state. Since these owners live in a different state, they are much more likely to be motivated sellers.
No. 2: Vacant Houses
Vacant houses are some of the most profitable deals. Houses that no one is actively living in, especially houses with a mortgage, deplete the owner’s cash flow. By targeting vacant houses, you may also be able to locate a tired landlord who no longer wants to deal with tenants and toilets.
No. 3: Preforeclosures (Pre-NODs)
Also known as a Pre-Notice of Default (NOD), a preforeclosure is when the owners of a property are behind on their mortgage payments, but the foreclosure process has not yet been started by the lender. These people are perfect candidates for using the strategy of buying subject to the existing mortgage or “buying on a wrap.” Buying subject-to means you don’t have to use private money to buy the house.
No. 4: Free and Clear
Owners who are “free and clear” do not have a mortgage on their home. They own the property and are free of debt on that property. These are good candidates for buying with seller financing. This is when the owner of the property sells you their house on terms, where they have a promissory note and you pay them monthly payments. Typically, these sellers will agree to take payments without charging interest. Surprisingly, 34% of houses in the United States are free and clear.
No. 5: Expired Listings
These are properties that have been in the MLS and the listing either expired or was canceled. Owners with expired listings can be good motivated sellers because they have tried to sell their property in the MLS without success. When a property has been on the market for a while, the seller’s motivation level is normally very high.
Your Realtor would be happy to provide you with a list of expired MLS listings, as long as they do not consistently also mail to properties on that list.
No. 6: Probates
Probates are properties owned by heirs of an estate. A large percentage of heirs can be motivated to sell, particularly when the property needs repairs and the heirs do not want to spend money on the property, nor to continue to pay carrying costs.
No. 7: Code Violations
County or city code violations can range from lack of upkeep on a property, such as the grass not being cut, to homes needing extensive repairs. Some properties with code violations may even be condemned by the county or the city as not habitable. Properties with code violations filed against them are a matter of public record.
Where Do I Get These Lists?
By now, you might be wondering where to get these different lists. Well, I have good news for you: I have a good friend who is in the business of providing current, high quality lists. The only list she cannot provide is expired MLS listings. Her name is Christy King and she can be reached by emailing [email protected].
If your next question is, “When I get these lists, what do I mail to these people?” I have even more good news for you. Christy can provide you with the lists you’re looking for and exactly what to mail to get a high response. I will warn you: Don’t put your personal cell phone number as your contact number in your mailer — use a 24/7 live-operator answering service. Christy will also be able to advise you on what answering service you should use.
Don’t sleep on direct mail marketing. It’s a seller’s market and we real estate investors need to be creative with our marketing if we want to consistently find great deals. Use these seven lists and watch your real estate investing business flourish.
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