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Hi, new to this forum, but it seems very helpful. I have a question. I want to try a new strategy, wholesaling, to my RE investing portfolio. I was told a simple but VERY effective formula to do this, but I’m missing a few important details. Among other clues, I was told to look for FSBO’s that are 20-30k+ below the median value in that area as possible Motivated Sellers…to use my time most effectively I’m trying to weed out as many non motivated sellers as I can without contacting them.
So my question is once I find a property that fits these parameters, are there some “key” words that I should be looking for or not looking for? I mean, if a property has new or remodeled “everything” in the description, for the most part are those motivated sellers? Or am I making it more complicated by reading the descriptions? Do descriptions give clues, or just look at #'s??
Any help would be greatly appreciated! 8)
Howdy Toby:
The words newly remodeled suggest that a rehabber bought the property and fixed it and is trying to sell it for a profit. If you are going to buy and rehab and try to resell for a profit then this deal is not for you. They may still be motivated having not been able to sell it for a while and just want out at even a loss… There are some better words like foreclosure pending, REO, divorce, estate sale, husband doing 20 to life, etc. A lot of your bargains will not be advertised in the newspaper as the seller has given up and moved away even before the posting.
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Thanks! FSBO’s are just 1 source I will try. Do you approach a FSBO any differently then a home that a realtor list?? And I’ve noticed alot of FSBO’s don’t include all the info needed to make an offer alot of times, like price, sq ft, sfr or condo, ect. I don’t know if I should call & get all the info needed to make an offer & see if it’s a potential motivated seller, then call back, or try and do it all on 1 call? Maybe someone with alot more exp. can help me here? Thanx! 8)
Howdy Toby:
Once you get some experience you will just know how to spot the motivated sellers. Price is usually the key. I always ask myself why the price is a lot lower than the market and if it something I can fix I will go after it. I do not always know on the first contact or visit or picture. On my 30,000 foot building in Corpus I saw it online at Loopnet, called the agent and after a few minutes I instructed him to fax me a full price contract and I would submit an offer. At $5.54 per foot I did not see how I could go wrong. It was a winner from the get go. Same thing with the last few deals I have done. The 31 units at $5K per unit was a no brainer even thought it needed a lot of work and had drug dealers living there, I knew I could fix the problems and make some serious money and I netted $100K.
The same with keepers that will cash flow. I bought a house for $16K that needed $4K in rehab that I knew I could rent for $500. I would love to find 100 more. On the other hand I was just offered a $154K duplex that will rent for $700 per side with zero down and no qualifying wrap note. I like the terms and if I knew for certain that Austin would grow as fast as San Diego did in the last few years I would not hesitate. I saw property in the same area years ago selling at $75K. If I cold get a partner to help fund the negative I may go for it or if I had better cash flow myself I may go for it but at the moment I am cold on it. At $100K and the same terms it would be a no brainer. You just know when you have a bargain.