If I were in your shoes, I would make the neighborhood(s) I both wanted to live in, and could afford, at high leverage, my primary farm. That’s basic, of course.
(BTW, I understand the feeling you’ve described. I’ve had the same sick feeling several times before… :biggrin )
Then I would profile all the homes that fit what I wanted to buy.
For example, I know that the average preforeclosure victim starts getting in trouble within the first 24 months of getting a new loan (refinancing especially it seems). I would locate all the new owners, disqualify the ones with ARM loans and second mortgage, if possible, and by square footage, bedrooms, baths, garage, lot size, etc.
Do some homework regarding the taxes being paid in the area by percentage of assessor’s valuation, etc. This way, you can more accurately determine what you want to afford, or not, as taxes influence the payment as much as the going interest rate it seems.
The more filtering you do, the less time you’ll waste, and the less calls you’ll receive, too, which may make you mistakenly think there’s no motivated sellers. That just means that when you do get a call, the juiciest deal has just presented itself.
I would mail all the owners of properties that fit your narrowly defined profile and expect the response rate to be minuscule at first. If you think 8 months of mailing once a month to the same list, you’ll get the exact deal you dreamed of getting.
In your case a nice handwritten letter would be very impressive. They are anyway, but since you’re buying for personal reasons, the extra organic approach will make you more credible and likable, even before you talk with a seller for the first time. It’s not time for “cutesy” however. No “hearts” and “smiley faces.” There’s friendly, and there’s overly familiar…
The more specific you make the terms you’re looking for in the letter, about what you want to accomplish, or are prepared to do, I think the better. It’s automatically qualifies the hotter prospects who will call you. The cold prospects won’t call if you’ve been specific about what you can/want to do. You’ll get the curious calling you that really aren’t interested in doing business, but that’s also part of the territory. I don’t spend time with these callers, but they can be fun to talk with.
Don’t be surprised if you get responses a year after mailing something…after the prospect warms up, or something happens to motivate them, and they’re seeing your letter pop up in their mailbox once a month.
Frankly, I don’t like doing Lease/Options as a buyer. I like getting the deed and giving myself all the exit strategies available without having to involve the seller further (or later). However, L/O’s are powerful financing tools when buying or selling regardless.
There’s a lot more I could say here, but one of the most important things I’ve learned is to speak and act confidently when pitching sellers on what you can/want to do. I mean “really” acting like you know what you’re doing …even if you don’t have a clue. Lie to yourself if you have to, but if you’re wishy-washy, uncertain, or looking around trying to “find the right words,” etc, you’re toast.
And frankly, maybe it would be a good idea to schedule some practice pitches on properties and prospects you could care less if you got. Rejection is a great tool for refining and honing your pitching arm.
Most people take rejection personally. The faster you can get passed this, the more effective you’ll be at pitching and closing on sellers.
“Fake it til you make it!” is my mantra. Nobody knows, except you, if you’ve said the wrong thing. However saying the wrong thing confidently will get you to closing and is supremely better than saying the right thing with an apologetic, sheepish, or milquetoast tone of a weenie.
That’s all I’ve got for now…
I’ve blogged several times about pitching sellers profitably. Check it out.
Have fun! :biggrin