5 steps to help you find motivated sellers in a low-inventory market.
The difference between a good and a great real estate investor is the ability to find motivated sellers. A seller is considered motivated if they are willing to sell at 10% to 30% below market value or with specific terms. So that’s a fantastic group to target, but how do you find them? Inventory is so low in this market that it can be difficult to find normal sellers, never mind motivated ones.
If you are looking to take your real estate investing to the next level, you need motivated sellers, so today I want to share five steps you can take to find them and generate leads:
1. Find your list. Before you can send marketing materials to motivated sellers, you need to find them. There are plenty of ways to find motivated sellers, but it’s probably best to stick with one or two methods to start so that you don’t get overwhelmed. A few groups likely to contain motivated sellers are absentee owners, out-of-state landlords, foreclosures, properties with liens, and homeowners in probate. You can also try reaching out to local attorneys and real estate agents to check if they know of any motivated sellers.
“Motivated sellers separate good investors from great ones.”
2. Create a marketing plan. Your marketing campaign should include three key parts: direct mail, a website squeeze page, and a phone lead-acquisition system. Of these three, direct mail is your most important tool. Don’t get bogged down with statistics. Instead, try to tap into primal emotions such as fear, greed, guilt, etc. You can bring logic into the equation once you get your lead on the phone.
3. Send your direct mail and wait for a response. This is where you throw out your line and hope for a bite. Usually, it will take repeated direct mail pieces to get a response, so be patient. A typical hit rate for direct mail is about 4% to 5%, so if you send out 250 letters, you can expect around 12 hits. If you’re a larger investor, hiring a third party to create and send you letters might be a good idea. If you’re more local, it probably makes more sense to make them yourself.
4. Filter your leads. Once you receive some leads, get them on the phone and ask them a few questions. Some common questions include: Why do you want to sell? How long have you lived in your home? How much do you expect from your sale? Make sure you don’t come across as too salesy; your job is to listen, ask questions, and build rapport.
5. Follow up. While you don’t want to bog your leads down with constant pestering, you must follow up. It takes time to cultivate a trusting relationship, and not every lead will be ready to sell as soon as you call them. By consistently staying in contact with your leads, you can be prepared to help them at just the right moment.
If you have questions about these steps or anything else, please give me a call or send me an email. I look forward to hearing from you!
