Motivated sellers for wholesaling easy to find, NOT!

Bird Dogs, Wholesaling
1

THe purpose of this post is simply to get some ideas/motivation for myself, because I’m starting to get frustrated. I see tons of posts on here that getting motivated sellers is the easy part, but buyers is the hard part. I’m getting frustrated in trying to find sellers. I am very new to this so I’m sure theres something I’m missing or not doing right.

I’ve only done 1 deal (which I go through CL) but it fell through. In that case I had a TON of buyers asking me about it just through advertising the property, so I don’t quite see why finding buyers is such a hard thing. If a deals a deal, then it’s going to get seen and picked up.

The ways I’ve tried marketing so far are as follows:

Driving around - Man I hear people talking about the deals they found doing this, but with my luck I never find anything!!! I’ve drivin for hours all over different parts of Dallas. I go to just average areas (not crack areas and not expensive areas).

CL and news classifieds - The only things I see on both of these are overpriced properties (not motivated sellers). The deal I found through this was through a wholesaler and NOT a motivated seller. the way the deal would have worked out was him assigning me the contract and then me in turn assigning mine out.

Pre-foreclosure list - Why did I spend the $50 for the list for this month??! I mean you buy this list and with only about 20 days prior to auction have to find some way to either direct mail or call them AND close the deal before it goes to auction. This is likely impossible, unless you call/door knock. Out of the 70 people or so I’ve looked up, I’ve only been able to find about 10 public phone #'s total. Out of those 10, no one picked up and I was only able to leave VM messages for 2. About 5 of them were disconnected. Unless there’s something I’m missing, talk about a waste of time…

Expired listings - This method seems somewhat plausible, but i have my concerns. I hooked up with a realtor to get my expireds after 90 days. He has sent me about 50 so far and everyday I get about 15-20 new ones. There is no way to mail to all of these people! Nor does it make sense, nor do I have the money to do that!! I don’t understand how you tell which ones to target??! You have a list of 50 properties (new, old, run down, excellent, updated, outdated, etc…). If you start some mail campaign to these guys, you don’t want to send 5-10 seperate letters to someone that has a new house and isn’t motivated to sell, right?? It’s a waste of time/money when you don’t know who/how to target people in this niche. What am I missing here??

Bandit signs - I’ve put out 90 bandit signs ALL over my city. I’ve put them on highway service roads to around neighborhoods I’m targeting. I spent about 6 hours putting that crap up in the middle of the night. Out of all of them, the ONLY calls I got were from 3 people harrassing me about the signs, 1 city official (or so he claimed) that I’d be fined if I kept putting them up, 1 investor looking to network, and finally 1 and only 1 motivated seller (who had no equity in her house at all). Not to mention this method is illegal.

I’m kinda at a point where I don’t know what to do here guys. It seems to me that in this market I should be finding alot of motivated sellers, but I’m not. Any advice, concerns, or criticisms would be greatly appreciated.

2

It’s really difficult, especially when you are starting out, to figure out what works and what doesn’t. There is a lot of trial and error involved. Persistence is key. The people I know who do well with direct mail, have a system in place, and are mailing more than once to each prospect. This can get expensive, but, if you have a good list (for example, a list of out of state owners that own their properties free and clear), you will get results over time. One guy I know sends SEVEN different letters to his prospects, and says the majority of the calls come after the 4th mailing.

As far as bandit signs go- I put out ONE THOUSAND in the first few months of last year. Finally, I stopped putting them out. I ended up getting one deal off of them in September (somehow a few signs remained after several months), and made 4k. I don’t use them anymore, but you get the picture that you really need to put a lot of them out and be consistent with them.

You just need to keep plugging along until you find something that works for you.

It’s not easy, but if you stick to it, you will figure it out. Sometimes you just have to change your approach.

Good luck,
Steph

3

Thanks for the reply Steph! Your words are motivational.

Might I ask what you’re doing and what is working for you? It sounds like from your post that your not doing direct mail or bandits… The problem I’m having is I don’t want to spend a bunch of time/money on something to find out it’s the wrong way of doing it (such as bandits).

It just seems that in such a market, it should be somewhat easier to find motivated sellers. I’m not sure what I’m missing or doing/not doing.

4

There is a perception that motivated sellers are hiding somewhere and there is a trick to find them. There is none. The only list that has high motivation is foreclosures.

You market until someone motivated finds you. You improve your chances by marketing to lists that has higher potential of finding motivation, but it does not mean there is always motivation.

for example, expired listings, FSBO, FRBO indicates that people are trying to sell. You market to them because one of them might be motivated. You don’t market to them thinking they must sell and expect them to call you to sell.

How do you find them?

  1. You send series of letters and post cards
  2. You advertise
  3. You make phone calls
  4. You knock on doors

Why marketing and advertising may not work?

  1. You are not consistent with it. You need to market to same prospect many times, and be religious about it.
  2. Your copy sucks. The object of direct marketing or advertising is not sending a letter or running an ad, but convincing the prospect (if motivated) to call. I’ve seen post cards that had pretty pictures on them and letters that sounded so professional but had no meat in them
  3. Solid call to action.
  4. Lack of testing of different messages. If something doesn’t work, tweak it and see if that improves the response.

What other reasons?

  1. Lack of knowledge in evaluating the deals. under/over estimating the value and under/over estimating the repairs
  2. Lack of negotiation skills
  3. Lack of closing skills

I see many investors asking “what should I say in my letter?” or “I am looking for a website.” These content is your bloodline. Throwing up a website with pretty pictures or a form to capture info does not generate leads. Sending out a letter does not generate a lead. The content much match your investing strategy. It must be a great copy. The reader must feel they are about to lose so much if they did not call you.

I have a website. The copy on it is so old and will be changing it when I go back to buying, but WITH the copy I have, I got a call from a guy telling me HE CANCELLED HIS LISTING WHEN HE READ MY WEBSITE SO HE CAN SELL ME HIS HOUSE! I was shocked, but extremely happy. The copy convinced him of why I am the best solution for HIS situation. I did not buy his house because not much equity and the price range, but that means my copy was on the right track.

When I mailed to expired listings, I did not expect to get x number of calls. I mailed to them hoping my metter would make its way to someone who might be motivated. I did not care about the incoming call volume, I was just waiting to sense motivation.

5

I really would like to answer some of your points specifically here…

THe purpose of this post is simply to get some ideas/motivation for myself, because I'm starting to get frustrated. I see tons of posts on here that getting motivated sellers is the easy part, but buyers is the hard part. I'm getting frustrated in trying to find sellers. I am very new to this so I'm sure theres something I'm missing or not doing right.

If you opened a new restaurant, would you expect different results? Would have been successful from day one, or would it not take lots of money, work, and time to become successful? what makes you think this is any different?

I've only done 1 deal (which I go through CL) but it fell through. In that case I had a TON of buyers asking me about it just through advertising the property, so I don't quite see why finding buyers is such a hard thing. If a deals a deal, then it's going to get seen and picked up.

So you found a deal through Craigs List. What exactly are your expectations? how many deals per year do you want to find on CraigsList? Give me a number please.

Driving around - Man I hear people talking about the deals they found doing this, but with my luck I never find anything!!! I've drivin for hours all over different parts of Dallas. I go to just average areas (not crack areas and not expensive areas).

What did you look for? how many hours a week do you have dedicated to driving around (actual not planned)? you mentioned hours. You certainly not expecting to find 1 deal per hour of driving. What is your expectation here?

CL and news classifieds - The only things I see on both of these are overpriced properties (not motivated sellers). The deal I found through this was through a wholesaler and NOT a motivated seller. the way the deal would have worked out was him assigning me the contract and then me in turn assigning mine out.

These are not lists of motivated sellers. These are lists of sellers. You are trading your time and energy for the POSSIBILITY of finding someone motivated. Again, how many deals per year do you hope to find using this method?

Pre-foreclosure list - Why did I spend the $50 for the list for this month??! I mean you buy this list and with only about 20 days prior to auction have to find some way to either direct mail or call them AND close the deal before it goes to auction. This is likely impossible, unless you call/door knock. Out of the 70 people or so I've looked up, I've only been able to find about 10 public phone #'s total. Out of those 10, no one picked up and I was only able to leave VM messages for 2. About 5 of them were disconnected. Unless there's something I'm missing, talk about a waste of time.....
Impossible... really? so no one in Texas is buying foreclosures? Have you marketed to them religiously? have you knocked on their doors? on average, you need to knock on 20 to 60 doors to get 1 deal, or you spend the money and do marketing to them.

As far as the timeline goes, figure out how other successful investors are doing and follow in their steps. I don’t get this impossible thing when others are doing it. If ONE person can do it, so can I… period… I just need to figure out how to get it done.

Expired listings - This method seems somewhat plausible, but i have my concerns. I hooked up with a realtor to get my expireds after 90 days. He has sent me about 50 so far and everyday I get about 15-20 new ones. There is no way to mail to all of these people! Nor does it make sense, nor do I have the money to do that!! I don't understand how you tell which ones to target??! You have a list of 50 properties (new, old, run down, excellent, updated, outdated, etc...). If you start some mail campaign to these guys, you don't want to send 5-10 seperate letters to someone that has a new house and isn't motivated to sell, right?? It's a waste of time/money when you don't know who/how to target people in this niche. What am I missing here??

You are missing a lot. YES you do want to send 5 to 10 letters to someone and everyone because there is no way to know who is motivated and who is not. There is no field in MLS that tells you if they are motivated or not.

If budget is an issue, then find other ways to make money. Only mail to those in certain price range. Pick houses that looks in bad shape, but remember. It is numbers game. If you mail to 100/week, the rate of success is not the same as mailing out 1000 letters.

Will it cost lots of money? you bet!

Bandit signs - I've put out 90 bandit signs ALL over my city. I've put them on highway service roads to around neighborhoods I'm targeting. I spent about 6 hours putting that crap up in the middle of the night. Out of all of them, the ONLY calls I got were from 3 people harrassing me about the signs, 1 city official (or so he claimed) that I'd be fined if I kept putting them up, 1 investor looking to network, and finally 1 and only 1 motivated seller (who had no equity in her house at all). Not to mention this method is illegal.

Put them somewhere else. Again, many investors find many deals through bandit signs. Learn where you should put them. And with 90 signs, you don’t put them all over the city. You concentrate them in a target area.

If it is working for everyone else but not for you, then you are doing something wrong.

I'm kinda at a point where I don't know what to do here guys. It seems to me that in this market I should be finding alot of motivated sellers, but I'm not. Any advice, concerns, or criticisms would be greatly appreciated.

When I started, I was spending $2000 to $6000 per month on marketing. I ran out of all of my savings before I found a deal that with the profit, returned half of my investment and helped me get going.

Was my marketing working? hardly. I was trying any and everything but I was not concentrating on this or that does not work. i was testing and trying to figure out how to make it work. The fact that it worked for others means I can make it happen.

Today, I spend about $150 to $300/month and I can get a deal or two on an average/month. If that doesn’t work, I send out 1000 post cards to give my marketing a kickstart.

This business is NOT easy. It takes experience, patience, money, dedication, and testing.

6

Ballgum,

I am going after REOs and properties on the mls.

A lot of people say you can’t find deals on the mls, and I say that’s bs. REOs are flooding the market right now, and the banks are motivated. I’m taking full advantage of the situation.

Steph

7

WOW, thanks for your comments guys!!

Thanks Fadi, that reallly puts things into perspective! :slight_smile: I know it takes time and isn’t easy. I guess the frustrating part to me is that I don’t want to spend 6k in advertising and 6 months in narrowing down what works and what doesn’t. Why reinvent the wheel? Like you said, if it’s working for one person then follow what they’re doing and it can work for you as well! Ultimately, what I’m trying to accomplish is to get enough CONSTANT deals (at least 1-2 per month) to where I can quit my job and focus full time on this. Then when I get more experience handling / finding deals, I want to flip, rent, etc…

Thanks for the comments again…I got some great ideas here.

Fadi, I’d like to answer some of the questions you brought up.

CL: I’m not really expecting to find any certain # of deals through here. I’m not sure what you mean by how many deals I expect to find anually through CL? I happend to come across the last one I did through CL just from browsing. I’m just experimenting with different techniques (CL especially because it’s popular and free).

Driving: I don’t have any set time per week dedicated. I just drive sometimes…So far out of the 10-15 hours or so total, I haven’t seen any vacant/abandoned properties (like what I hear alot of people on here talking about. Maybe I’m targeting the wrong areas…). All I’ve seen is a total of about 8 FSBO.

Foreclosure: I know it’s possible since I see others doing it, I just don’t know how it’s possible! What I was trying to say about impossible in this area is that it seems nearly impossible to direct mail market to people on these lists and still have enough time to get a deal. Just as an example, you got your list 22 days before auction. You spend a day looking at the deals you want to market to. You then mail out to those people on the 21st day, then maybe it takes a couple days before it reaches that person. Unless they call you right away, there isn’t going to be time to keep mailing to them right?? By the time you’ve mailed to them a couple of times, your down to 12 days or so before auction. Then you’ve got maybe 10 days to close if that. It just seems very hard to do direct mail to this kind of list. I mean have you noticed that people respond somewhat quicker since they’re facing foreclosure or does it still take several mailings to get a response??

I do however like the idea of door knocking. I haven’t done that yet. I suppose I could get together a list of about 20-40 properties and just spend all day saturday driving around. This method would give me quite a bit more time to close.

Expired: I know these people want to sell but aren’t necessarily motivated. I just didn’t want to mail out blindly to every expired I’m getting and thought there might be some way to narrow it down a bit. I just started this and alot of the listings I’m receiving are of newer immaculate looking homes that don’t look like they would be as easy to target as older, run down houses. But I think you answered that and gave me some ideas by only targeting places that look to be in bad shape or maybe slightly older houses. Maybe I can have the realtor only send me expireds houses that are older than a certain year?

You mentioned you make calls to people. How do you get ahold of people when their numbers are unlisted? Do you use some pay service to get this info? Public info doesn’t show much of anything for most listings as far as unlisted phone numbers.

Bandits: The only thing I can think of is that I put them in the wrong areas, but I was working with a guy awhile back who used to put bandits on the service roads and he was getting business. I however didn’t get much of anything doing the same thing he was doing. The only thing different is that he had been placing them around for months. Honestly though, with the fines, harassment, and the fact that it’s illegal I think I’ll try other areas.

You mentioned you spent 2-6k/per month on marketing at first. How many months did you go before you got a deal and how many deals were you getting per month with this much advertising? I don’t mind dropping some money and time, but what I don’t want is to drop a bunch of money/time only to find out I’m doing it all wrong and that’s why my advertising wasn’t affective…

I know it’s hard work when starting out. I guess I just needed a little perspective and reality to put me back in place.

8

if I had to do it again, I would have not spent that much either. I did cause of the way i think and I refused to give up, so I threw all my weight behind it.

my response was because I noticed you’re giving up and starting to use execuses by saying things do not work when they are working for others.

What you are really looking for is increasing response rate and reducing cost since you’re wholesaling. My marketing works for me, but does not work if I was trying to wholesale deals. My marketing works for my investment style.

This is my personal opinion, but I don’t think wholesaling should be the main focus of anyone’s business. Wholesaling should be a way to generate enough saving to do other type of investing. Once you have enough, you can start shopping other wholesalers inventory.

Why don’t you try this… why don’t you market for birddogs and have them do the leg work for you? You will need to tell them where to look, how to look…etc. and do share half the wholesale fee with them. Have them do the door knocking, bandit signs, flyers, driving around etc.
The issue with birddogs is that there tend to be high turnover. Meaning, most will not last for more than few weeks at best so you need to keep recruiting them.

9

I know this seems rather elementary…but “Investors who make offers get deals”. Do not assume you know that your offer won’t be accepted. People rarely tell us the whole story. Hop on Realtor.com or something similar. Look for “motivational” keywords. Make offers. Lots of offers! Those who are most successful continue to make offers, even after they have sometimes had 100s rejected. Make at least 10 offers - every single day and you’ll start getting deals!

You may also want to try…

Finding Motivated Sellers:

  1. Attending Your Local REIA to network with and see what other active investors are doing to find deals…don’t reinvent the wheel, just do what they’re doing!
  2. Putting Up Bandit Signs
  3. Driving for Dollars
  4. Sending Direct Mail - to out of state home owners
  5. Calling FRBOs (For Rent by Owner) ads/signs
  6. Calling FSBOs (For Sale by Owner)
  7. Contacting Bird-dogs
  8. Continually searching CraigsList
  9. Advertising on the web or in the newspapers
  10. Plastering Your “I Buy Houses” Business Cards EVERYWHERE
  11. Contacting Property Management Companies and asking them to refer their owners who are ready to sell to them
  12. Telling at least 10 new people every single day that you’re looking to buy houses…postal workers, exterminators, gas/electric residential meter readers, grocery store clerks, gas station attendants, everyone…
  13. Having a Realtor check the MLS for expired listings or keywords - DOM, vacant, estate, preforeclosure, must sell, fixer-upper, closing help, moving, relocated, divorce, etc…
  14. Checking Court Records for:
    a. preforeclosures,
    b. evictions,
    c. pending divorces,
    d. probate
    e. bankruptcy
  15. Launch your own website

Chris

10

Putting offers is definitely something that I would like to do. But every offer requires you to put some deposit with it. How do you handle that? Do you actually send checks with every offer ?

Thanks
RK

11

You do not send it with your offer, your realtor holds on to it if you have a realtor. Give him one check to hold on and to send it with every offer, but you have to give him a second and third check if more than one offer is accepted.

An alternative would be to make the earnest money continguent on the offer being accepted because you are an investor and buy multiple houses at a time and would only invest your money in accepted offers.

12

I agree with Steph on this. There are a TON of properties on the MLS and if you are consistently putting low low offers on properties, you WILL get some bites. What will happen is the bank will probably say no, and then they’ll get a few offers for higher and then 2-3 months later the financing will fall through and they sat for 3 more months taking a loss and then they will be ready to accept your offer. But you need a good agent and to be making offers all the time.

Like they say - “if your offers don’t piss the realtors off, you didn’t offer low enough”