How do I market to Subject 2 petential sellers?
This is an old post, but I will reply anyway. Nothing special, do the same marketing campain you would do to any type. You just negotiate with them. Usually if the seller is distressed, they will do it and not even blink.
I usually tell them:
“As you know, I am an investor and I don’t plan to live in the house. I am going to fix the house up and place it back on the market. To reduce my cost and be able to offer you $XXX, I’ll buy the house and take over the existing loan payments until I sell the house. That way I don’t have to pay 5% new loan closing fees and wait 30 more days to close”
But how do you find them. How do you market to find them?
I have I buy houses type ad in the paper, and I do direct mail to preforeclosures and expired listings.
I’ve drifted into targeting sub2 with little equity because in my market it’s such a strong buyers market that doing the old buy and flip is too stressing mentally and financially.
Unlike some say, nothing is easy. What I do is buy with no money and lease option. That way the cash oop is positive. I don’t want to put myself behind the 8 ball and promise to sell right away.
I think you are going to find a sub2 with equity will need work. My last deal was the owner bought an reo and didn’t do any work on it. A yr later I bought it sub2 with no money except a back payment, put 12K into it with repairs and payments for 5 months and walked with about 20K profit at resale. I was lucky. And I know it.
I learned my lesson. No more rehabs in this market. If you are in a cold market beware. Do a sub2 with no money oop in good shape and lease opt. There are plenty of tenant/buyers out there in a cold market. That’s why it’s cold!
Work the market, make the money.
This seems to work for me as well, seeing
that I’m in what seems like a year-round buyers’
market. Me buying - good, me selling - just
be a lil’ more creative than the crowd.
By “cold” are you meaning slow…or
I buy sub2 all the time. Pretty houses, tons of equity, little to no work, median price range up to double in my area. With sub2, even if you buy with little to no equity because everyone and their brother refi’d recently, you are still not having to get a loan in your name (if you’re using private funds to finance the repairs, that’s even better!)
The key is always going to come back to marketing. When you write anyone (preforeclosure, NOD’s, expired listings, etc) you’ve got to make sure you target your audience.
Not every lead is going to be a home run every time.
Sub2 marketing is no different than any other form of marketing to motivated sellers. What matters most is:
- Your list (one situation per list, please)
- Your material (write your own letters to ensure your personality and buying style set you apart from those content to use what they got from a bootcamp manual along with 300 other people.)
Make sure your direct mail to preforeclosures talks ONLY about being in preforeclosure. Don’t make the seller guess why you’re writing them (aka the postcards that say, "Behind on payments? Divorce? Bankruptcy? We can help!)
The bottom line, Helixpoint, is that you’ve got to target your marketing to specific situations and only after you’ve communicated specific benefits to the seller, then you talk about the assistance you can offer.
newer houses almost always sell faster. you can LO or CFD these houses, or wrap if you desire. the purchase price is the future appraised value based on the current appreciation rate. even at 2-3% u will still come out ahead in 2 years when they buy outright or refi. also, on a newer house, the neighborhood is also newer in most cases. get a sizable DP and you are on your way.