How To Find Motivated Sellers

Mass marketing is great when you are fist starting out and have time but limited money. Or you have enough money and experience to hire people who will sift through leads for you. The following list of mass marketing methods will go from cheapest cost per lead to most expensive.

Fliers.
When first starting, the cheapest way to find motivated sellers is to put “I Buy Houses” fliers on public bulletin boards. Put them up at grocery stores, laundry mats and any other public bulletin board you can find.

Business Cards.
Get a business card printed saying that you buy homes in any location and any condition with cash. Tell each person, that you will give them a referral fee for every house that you buy. Put these out in gas stations where you can place business cards, hand them out to as many people as you can every day.

Bandit Signs.
Buy some corrugated plastic bandit signs. Bigger are better. Put on them that you buy homes cash and put your phone number. Place these where people stop and sit. On and off ramp of the highway, traffic lights, stop signs, grocery store exits, be creative you will get lots of motivated sellers calling you.

If you do those three methods your phone should be ringing everyday. You will get lots of calls, many of the callers will not be motivated, remember that you are a buyer, get the seller to sell you the house. As a generic measure the longer you can get the person to talk about the house the more motivated they are.

Once you start to get a good amount of cash flow you can start to try out additional methods such as marketing in the penny saver mailers, getting bus benches and billboards. All of these methods work and will give you the greatest variety of deals. You need to take on each lead with an open mind and try to find a way to monetize it.

Direct mail on the other hand will give you a more uniform set of motivated sellers.

How To Find Motivated Sellers – Direct Mail

Direct mail is exciting. We have some many aspects to cover. First we need to find the motivated sellers, next we need to send them a specific message which is tailored to their needs. If done correctly you can get rich and see reply rates up to and exceeding 20%. Which is nearly unheard of in other industries. We are able to find some extremely motivated sellers with direct mail.

From my experience the best lists are as follows:
1.Probates: These are excellent motivated sellers, everybody and their mother are going after probates so you will face some competition however, I still get calls from around 10% of my mailers. If you are not going after probates, you should.
2.Pre-Foreclosures – Ideally, you want to get the 30-60-90 day delinquent list. These are people who are 30-60-90 days late on their mortgages. They are not close to getting foreclosed. Not many people have this list, so you will find a lot of great motivated sellers.
3.Absentee Owners – This is an easy list to get, just call up a list broker and ask for all the absentee owners in your area. It is important to use your negotiating skills when working with list brokers. Their prices are always negotiable.
4.Evictions – Go to your local courthouse, find the evictions room and go through their records. It is best if you have a phone with the ability to scan documents. You can get tons of high quality leads.
5.Code Violations – Where I live you can get all the code violations online. I have not had huge success with it, but your area may be different.

How To Find Motivated Sellers – Conclusion.

If you are investing in real estate full time, and are taking all the calls yourself. You should set up an optimized website on Google. Put some fliers out at your local grocery store and get some highly targeted direct mail. This will give you a nice mix of high quality motivated sellers and generic long shot motivated sellers. Your phone should be ringing around 4 times a day with sellers looking to give you a house. In theory this should lead you to getting at least 1 house a week. That is what I shoot for. It leaves me enough time to focus on other aspects of my business. While providing a decent income. When the time comes and I need to make more money I simply ramp up my marketing.

How To Get A 20% Response Rate On Direct Mail

The key to getting a 20% response rate on direct mail comes down to these three factors:
1.Your List
2.Your Open Rate
3.Your Message

Your List

I get 20% response rates when I send direct mail to lists which myself or my team make.

Meaning we get leads from the courthouse and then sift through them.

The lists I pursue are Probates, Evictions, Code Violations and Divorces.

When we mail larger lists which we have purchased, the response rate is generally lower. However, we have gotten 10% on large samples of these mailings.

The key here is to eliminate as many bad leads as possible before purchasing the list. Depending on your target, look through your list of potential factors. Think about what your ideal motivated seller looks like.

You can get buy very accurate lists. Such as people who have owned their property for 20-30yrs, have 20k or more of equity, the house characteristics you desire, absentee owner, non-corporation, only one person on the deed, the house was listed in the last 4 years and they are behind on their taxes. If you purchase a list like this in a very broad area you should have a very high response rate if you get your open rate and message right.

Open Rate

To get a good open rate your letter needs to stand out. When the prospect looks at it they need to be burning to open it. Use a plain white envelop, first class stamp postage, a real address return address (not a PO Box), don’t put a company name on the letter and hand write the address if possible.

I just print out the letter and get great results, I just make the text on the outside stand out, through using large letters, non-traditional fonts and colors. I like to use a mahogany for the address.

Your Message

If you don’t have much experience with copy writing check out this book by Dan Kennedy – The Ultimate Sales Letter.

It will help you a lot.

If you just want to have the letters done for you get Real Estate Match Maker, it is a program which will automate your real estate investing career. It has direct mail templates in it which you can copy.

When choosing which letter to send, you want to look for the letters with a clear message, one that makes you almost embarrassed to send out. Those are the best letters, if you think the motivated sellers are going to call you up and scream at you if you send this letter, you have found a winner. The ones which are not as direct and try to be nice wont pull as well.
Max