Chapter 4: Finding Sellers
One of the facts-of-life in real estate investing is that most sellers simply want to sell their property. Only a small percentage must sell their properties. Your objective is to find the sellers that have to sell. There is no end to the reasons people must sell. The property may be vacant and subject to vandalism. The owners may be involved in a divorce. The property may need repairs that the owners can’t afford to make. They may be behind in their payments. They may have what they consider to be bad tenants. Perhaps there are liens against the property. The owner may be forced to sell due to job relocation. The former owner may have died and the heirs simply want cash instead of real estate. Possibly there was fire damage that the owner simply can’t deal with. Whatever the endless list of reasons, there are people out there who would be very grateful to someone like you for helping them solve their problem. Remember, this is a problem-solving business with real estate as simply the commodity involved.
The objective is to make these “must sellers” aware that you exist and that you can help them solve their problem. One of the most effective methods to get your phone to ring is to run a classified ad in the local paper offering to buy. Since we’re still talking about houses, one of the successful ads I’ve run is as follows:
We’ll buy or lease your house. Any location. Any condition. Can pay cash and close quickly. (123) 555-1234
You place this ad in the Houses For Sale column of your newspaper. Yes, there are other sections of the classified section in which you’ll find similar offers to purchase or to loan money. These sections might be titled Real Estate Wanted or Money To Loan. Dare to be different from the other investors. Go where your prospective seller is looking. Run your ad in the Houses For Sale section. And once you start, run the ad continuously. Do not stop. The day you stop, you’ll miss that one seller that could have netted you another sizable profit. Accept the fact that advertising is one of your costs of doing business. The profits from just one property can cover your total advertising costs for ten (10) years. Don’t waste money, but don’t be too stingy, either.
We use business cards and flyers that also promote this message. I drew a line sketch of a house roof complete with a brick chimney off to one side and with the words “We’ll Buy Or Lease Your House” inside that line sketch. Below the sketch, we list our business name, e-mail address and website URL. In the lower left- and right hand corners, we list our phone numbers in each of the two states in which we concentrate. On the back of the card, we have a “Dear Seller” message in which we tell them what we do. We suggest several of the reasons why they might need to sell (see above), and then we comment that these are common problems that can happen to anyone. We tell them we buy houses from people in situations just like yours in most areas and price ranges. We also tell them we will handle all the paperwork and can probably close quickly thus eliminating their problems. It is also important to mention that we are not Realtors® and we are not interested in listing their property for sale. Rather, we are investors working with a group of investors that buys 5-10 houses per month, that we would like to buy even more houses and we can probably buy your house with no hassles. Finally, we tell them to call us to find out how we might be able to help them, no cost or obligation. If you can make your prospective seller feel comfortable and at-ease working with you, you will be very successful in your real estate program.
Since you want your message to attract attention, you’re going to have to ignore your personal feelings and step outside of the box into what might be considered “garish” colors. Our current business cards and flyers are printed on a bright lime green card stock. Other colors we’ve used include dayglow red and dayglow orange. Remember, you want attention, not a prize for an esthetically perfect business card. The more outlandish, the better. Other investors have used simulations of $100 bills for their cards. When folded, these look like real money and get people to at least look at them. The point is, you want to stand out from the crowd.
Still other ways of finding people interested in working with you include:
- Websites where you get a chance to go into the detail of how you operate. You can also show pictures of properties you’ve purchased and present actual case histories of people you’ve helped (be sure to use fictitious names). When you’re in full operation, you’ll actually want to use two (2) websites: one for buying houses and the other for selling houses. You do not want to confuse a prospect by having both options on the same site.
- Real Estate Wanted signs on power poles in neighborhoods where you’d like to buy property. The sign should simply say “We Buy Houses” and your phone number. Those sellers who are under pressure to sell will notice your sign and your phone will ring. Unfortunately, the phone may also ring as a result of the local officials calling to complain about your signs. You should consider using an automated answering service to anonymously screen all these calls. URL http://www.banditsigns.com/
- Billboards were already mentioned above. I’m sure you’ve noticed the “We Buy Ugly Houses” billboards. They are now in many of the larger cities throughout the USA. I personally disagree with the message stating “Ugly” because no one, no matter how desperate they are to sell, wants to think of their house as being ugly. Don’t insult your prospect. Yet, the folks who spend their money on those billboards must be getting enough results to justify such an unflattering advertisement.
- After you successfully purchase your first property, you should immediately place one of your signs in the front yard or front window telling the neighborhood that you buy houses.
- FSBO stands for For Sale By Owner. More and more people are electing to try to sell their home without a Realtor® in order to save on commissions. After having their home on the market for a period of time and having people constantly traipsing through their home, some sellers will be receptive to working with you just to get the process finished and over-with. Jot down the phone numbers of the FSBOs as you see them and then keep in touch until the property is finally sold. Time and circumstances change. You never know when a seller becomes fed-up and will then become receptive to working with you.
- Bulletin boards in supermarkets, Laundromats, and other public locations are a good place for at least your business card if not a larger flyer. Keep a list of where you’ve placed these cards because you will have to replenish them on a regular basis.
- Local weekly publications such as the Penny-Saver or Dollar-Saver that is automatically delivered to every home in a city. Larger cities breakdown their city into specific areas. You can select the specific area(s) you want to target and only have your ad appear in those publications. If you start, plan on continuing indefinitely. Realtors® call it “Farming an area.”
- Local cable TV is rapidly becoming an excellent way to promote your message. Just like the Penny-Saver concept, you can target specific areas thus saving money and making your promotion more efficient.
- Door-to-door flyers delivered by a student after school or by a professional service to your target area(s). Contact a local house painter or gardener or landscaper with which to co-promote your programs. Your flyer will be printed on both sides: one side being your message and the other side being that of your co-promoter. If you’re a good salesperson, you may be able to get your co-promoter to cover all- or most of the costs.
- Post cards to your target neighborhood(s) work well. As with any program, you must continue with the repetition of your message on an on-going basis. I’ve had people call me as late as a year after I stopped mailing to a particular area. They’d saved my post card for future use.
- Hire students to drive neighborhoods of interest and report to back you with pictures and other information about properties that might be of interest. You will have to set the standards by which they search, but it can save you valuable time in finding potential properties.
- Magnetic signs on your car indicating that you buy houses. I’ve also seen cars, vans and trucks with huge block vinyl letters covering the entire sides of the vehicles stating that the vehicle owner buys houses. Be sure to include a phone number and website address.
- Ask for referrals. Even if you are unsuccessful in putting together a particular deal, ask those folks if they know of any other people who might want to sell their house. If you’ve treated the people fairly even though you weren’t able to do business with them, they will still be willing to spread your name among their friends.
- Offer cash incentives for referrals. Offer to pay the referring party $100 or even $500 for every person they refer to you and with whom you are ultimately able to do business. Nothing speaks louder than cash.
- Realtors® can sometimes put you in contact with would-be sellers that do not have sufficient equity from which to pay a commission. The Realtor® can’t accept the listing but could accept a referral fee from you for a successful transaction.
Perhaps my main point here is “let your imagination be your guide.” Newbies tend to become discouraged quickly when they can’t seem to find a seller with whom they can work. Rather than let yourself become discouraged, use as many of the above suggestions as you can – right from the get-go. Then, persist. Don’t quit because the first dozen sellers you contacted aren’t interested in working with you. After you’ve made at least 100 offers and still have nothing to show for it, then you can send me your complaint. That’s a very safe offer on my part because you’ll never get anywhere close to 100 offers without generating several successful deals. It’s a numbers game. Keep making offers. Don’t let yourself become bogged-down in one or two deals. Keep filling the pipeline with potential deals. When one deal turns sour, you still have a full pipeline of other deals waiting for your help. This is a marketing game. Real estate is simply the product.
NOTE: Stay tuned for Part 5