I received an email today about a guy who has unlimited transactional funding. He is willing to let us use this for our own funding fees. He will send us a pre-approval letter and sell us the software to train bird dogs to go find us vacant houses and software to target bank owned houses that we can make offers using his cash funding. Then we can wholesale it to the end buyer and make $5,000, $10,000 even $55,000 on a wholesale deal. . . . sign me up and send me my magic beans please.
First I want to comment on his MLS method. . . which worked great about 5 years ago. Find the great fixer uppers that are not yet listed but have an agent getting ready to list them. Then call up said Realtor and let them know you are a cash buyer, not represented by a buyers agent (so that the listing agent can get both sides of the transaction and make more money) and to call you as soon as they get listing info. Then you can make your low ball offer, allowing them to get both sides of the transaction and then because they have 3 days from the time the receive the listing agreement from the bank until they have to put it in MLS, you are able to get it under contract before anyone else sees it and the agent puts the house in MLS as “pending” . Just so you know, if you listened to the same webinar that I did that this is a TOTAL LOAD OF CRAP!!
First of all, agents do have 3 days from the day they get the listing agreement until they have to technically put in MLS, at least here in KC. BUT if the seller is a Bank Seller of any consequence, meaning they have sold more than one or two foreclosed houses, they WILL NOT consider any offers for the first 3 days listed and if you are an investor buyer, often, they will not look at your offers for the first 15 maybe 20 days it’s listed, they want the owner occupants to buy them. Plus you are getting an MLS house under contract and of late they are quite high priced with 10 or 12 other people making a bid on it too, so your chances of buying cheap to sell a bit higher but still low enough for your investor end buyer to make a profit, while it can be done, it’s a lot of paperwork shuffling.
But we are all looking for a great deal . . . . so how can we find them. I do like the bird dog idea, although paying someone $5 to $10 for every lead they bring me seems a bit much, I want the bird dog to only bring me deals . . . so we can go out and train a few bird dogs on exactly what to bring you, but also train them on how to put a deal together and then you might be in better business.
So how do you find deals. I have friends stop by my office, they want to learn what I do in 3 easy steps . . . HA! I would love to tell you how I find all the deals . . . but keep in mind it’s not quite a simple as it sounds. So here goes.
1. Have a Website: I maintain a website for buyers, it’s not generic, it’s loaded with information about selling houses and it’s loaded with the key words of sell, house, fast, cash, kansas, city and all the other cities I buy. It also has a bunch of information to help the motivated sellers I target: How do you fix up your house. How do you clean out or trash your house. Where do you find an attorney to help with the probate process. Etc.
2. Drive Traffic to Above Website:
- Write articles about selling houses and post on the website blog and then post them to all my social media pages on Facebook, LinkedIn, Twitter, Google Plus and Others
- Write press releases about our company and buying houses in Kansas City and post them on a bunch of free press release sites link them back to my website that is www.kcmoHomeBuyer.com.
- We record videos about selling your house and post them on video sites like YouTube and our website and link them to all the social media pages
- We have been doing this for quite a long time, so now when people go to the internet to research selling their house fast – today at least they get
- HomeVestors Sites
- kcmoHomeBuyer Site
- Some YouTube Videos that go to other sites
3. Craigslist is my next tool and we try to remember to post 2 or 3 ads about buying houses on Craigslist.com and Backpage.com every day.
4. Direct Mail – this generates a ton of leads, but often times 3 to 6 months after they get the initial letter. And usually they need to get one or two lettters over time. So if you go out and buy a list of 1000 contacts and mail it once, spending about $1000 to buy and send mail piece you are not going to get a lot of calls. The deals are in mailing consistently to a quality list of potential sellers and some will call you after you mail several times and others will save the letter and call you down the road.
But who do you send letters to? Well the answer lies in what you think would be a good motivated seller:
- Absentee Owners, people who own houses they do not live in.
- Vacant House owners, people who own a vacant house
- People in Foreclosure
- People getting divorced
- People with rentals who are always in eviction court or code violation / housing court
- People who have been trying to sell and can’t
- People in Bankruptcy
- People who have died or their heirs
- Expired Listings
- People who just got married and own 2 houses
- People who are behind on their taxes.
So if you can buy or assemble a list of names and contact information of people who might be highly motivated to sell their house, you can then take the time to send them a letter or a post card.
Now I know everyone and their brother is doing direct mail marketing for houses because our company is on the absentee owner list and we get letters weekly from investors trying to buy house and trying to sell houses. So I have a lot of examples.
I recommend that you write a nice hand written letter that uses the owner name, references the house that they own, talks about selling fast for all cash with no fees, and make it personal so they want to talk to you. Then hand address the envelope, hand return address or use the personal looking return address labels and also use a friendly, non commercial looking stamp. Then in a week, a month or 6 months, depending on the type of list you are mailing send them another letter or maybe a nice simple postcard to remind them you are out there.
Next, you can Network your way to deals. I have a couple of friends that would do anything for anybody as long as they were in need and it were legal. They are very active in their community and they are known as the people who buy houses. So when ever a fixer upper, problem house comes up – think hoarders house – someone gives them a call and they get a great deal. I have another guru friend that goes out and teaches wholesaling and how to go find deals in the hopes that his students will bring him the larger deals that are a bit too much money for the student and in the price range of what the guru wants to do. In fact I know several gurus who do this, so I know it works.
So if you need deals, first realize that everyone is competing for the same deals . . . there still out there but you do have to work to get them to call you up. The next steps are networking with the community and people you know to see if they might be able to refer you a deal or two. Then you need to get out your marketing hat and start marketing . . . paid ads on Google, Bing and Facebook, Billboard and even TV Commercials like we see one of our members doing.
Article Written by Kim Tucker. Kim and her family have been investing in Kansas City Real Estate since early 2000. Rehabbing, Flipping, Renting, Seller Financing and Wholesaling Houses. If you are not on her buyers list, go sign up at www.KCInvest.com and if you have a house to sell, please submit at www.kcmoHomeBuyer.com