OfflineFinding properties
The first and probably biggest hurdle that you are going to have to overcome, is finding “The For Sale My Owner” properties. The internet is going to be your best weapon here. While there are a host of websites that offer access to these properties for a monthly or one-time fee, you can probably find most of them through different online forums and free online classified websites. Craigslist is one such website that offers its user’s free access to post and respond as needed. You can also go to www.backpage.com, or www.upillar.com to do these same searches. So begin your search at one of these websites. Try doing a search on a search engine for “for sale by owner” properties in your area to see what else you come up with.
Another tried and true method is to drive around looking for yard signs. If there is a hand written sign that is usually a good indication of an FSBO, while other properties will have signage that specifically states that it is a “for sale by owner” deal. When in doubt, call.
The MLS can be another tool that some “for sale by owner” sellers use. Check with your real estate agent to find out what they can do to make your search a little bit easier. And always remember, when looking for motivated sellers- it never hurts to ask!
Making a deal
Once you find a property that is of interest, it’s time to start creating a good deal. One of the good things about a “for sale by owner” property is that nobody is there whispering in the sellers ear to hold out for more. While they may be experienced in real estate and understand fair market value and the current state of the real estate market, they could just as easily not be. So you end up gambling. It is also important to remember that the fair market value of a home takes into account the fees associated with selling and marketing that property. So deduct anywhere from 10-15 thousand since they don’t have to pay commission on their “for sale by owner” property. This in and of itself means an instant savings for you!
Potential Downfalls
While the “for sale by owner” property could be a goldmine there are some problems that could arise from such a transaction. First off, you may find a seller that takes each and every offer emotional. Without a realtor to keep them abreast of the market, they may ask for more than the home is actually worth. The buying process can also be complicated without the help of a trained professional. So make sure to do your homework beforehand to get the best deal possible.
All the details
“For sale by owner” properties can be a good deal if you do your research beforehand. Invest a little bit of time getting a feel for the market and the properties available, and you could end up making a killing.
Good Luck and Happy Investing!
Thank you for this valuable information. I will make certain that I do my homework first on a property and use the websites to locate properties.
God Bless
Bertha Coleman
Hi Coach thanks, Jim
jbischoff
I found a FSBO. I've contacted the seller who has three properties. By word of mouth a couple of people are interested in the multi family unit. I called the seller get an appointment to view the property and get it under contract. He asked me a bunch of questions like "How do I plan to secure the buy." He said, "If you sign a contract with me and it does not sell then you must buy the property." He asked if I intended to flip it and if I had an end buyer. My intention was to meet with him to get it under contract. I asked to view the property. Then he wants to show it to me with my partner. Of the partner is someone to sell it too. I must have said the wrong thing. It's not going by the book. I'm having a hard time with getting to the offer, much less the property under contract and then contracting with an end buyer. Do you have any suggestions as to what I should say, should have said, forget the deal, a new strategy? Anything! Thank you, Brenda
Bren
I would always tell any potential seller that you are working with that your intention is to close on the deal.
Note that I said "CLOSE ON THE DEAL".
I didn't say "PURCHASE THE PROPERTY".
Closing on the deal could be an assignment of contract or a double closing.
I wouldn't worry at this point about bringing up the fact that you may wholesale this deal to another buyer. All that does is devalue you to the seller and makes them want to work with the end buyer and not you.
When you are making offers, you are the buyer, and that's all the seller needs to know. If you purchase the property yourself, or if you wholesale it to another buyer, the seller will still be getting the agreed price that they accepted and that is all that matters in the end. I hope this helps.
Thanks,
Happy Investing!
Matt W.