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- Have you ever thought about why motivated sellers exist?
I'm mean honestly, like
why would any rational person sell their property
at a fraction of its real value?
That's just like throwing away money, right?
What kind of a person does that?
In this video, we're gonna talk
about some of the most common reasons
why people sell their real estate at prices
that are far below their fair-market value.
When you understand what's going on behind the scenes,
when a person says, "Yes," to a ridiculously low offer,
it's gonna help you get creative,
and better understand where these motivated sellers are,
and how to use the tools and tactics we're gonna cover
in this course.
So, before we cover, the how, of finding motivated sellers,
think of this lesson as, the why.
Why are some property owners so motivated to sell,
where can you find these people,
how can you think the way a motivated seller thinks?
Take a strategy like direct mail, for example.
When we send out direct mail,
we aren't just sending it to anyone and everyone.
We're filtering our mailing list
so that only a very specific type of person
actually receives our mail.
And who are these people exactly?
Are we talking about out-of-state owners,
young professionals, people who live in certain zip codes?
It's crucial to have a basic knowledge
of what causes a property owner to be motivated to sell,
in the first place.
'Cause when you know who your target audience is,
you'll know how to direct your marketing efforts
and get a much bigger bang from the time and money you spend
to looking for these people.
To do this, all you need to do is answer a simple question.
What situation, or circumstance,
would cause someone to sell their real estate
for pennies on the dollar?
Now, some of these situations
are a little bit more obvious than others.
So in this video, we're gonna talk
about some of the most common,
and some not so common, sources of motivation.
So, one common group of motivated sellers
are what we call, older people.
Now, when we're talking about older people,
we're talking about folks
who are usually around the age of 65 and up.
And this is actually a demographic
that a lot of house wholesalers target.
And really, anybody over 50, I think,
is probably worth hitting.
Older people typically have less of a desire
to continue managing a burdensome property
and they're more likely to be willing to sell their property
at a discount, for a number o' reasons.
A lotta times, they might the property is worth a lot less
than the current market value
because they've pretty much just lost touch with the market.
In a lotta cases, they're headed towards retirement,
or maybe they're already there,
and they don't really care about making a ton of money
at this point in their life.
They just want to get rid of this problem.
Sometimes people, who are up their in age,
might have medical bills, or a sick spouse
that they have to tend to,
and their primary concern
is not all about making the most from the property,
but simply getting cash, fast,
and they don't have the time or energy to deal with a house
and all the troubles that come with it.
Another group of people that can be great targets
when you're trying to find motivated sellers,
are what we call, empty nesters.
So empty nesters are people
who are usually in their 50s, or older,
and they have a home with at least three
or more bedrooms in it, and two or more bathrooms.
And the reason this is a good audience to target
is because a lotta times, people in this situation,
might have a larger house,
and they used to have kids living at home,
but those kids have now moved out,
and they've got this huge house
that they need to take care of,
and they, frankly, just want to downsize.
Of course, when people are in this situation,
it doesn't automatically mean
they're will to sell for cheap,
but since these folks are usually in a place
where they're looking to downsize,
you could find some low-hanging fruit here.
Another great way to find people
who can sell their properties for a huge discount,
is to find owners who have 50%,
or higher, equity in their property.
So, what this basically means, is people who have a low,
or lower, or maybe even a non-existent mortgage balance,
or perhaps no mortgage at all on their property,
and they're in a position
where they have a lot more room
to be flexible on their selling price,
because they aren't obligated
to pay off a massive debt when they sell.
They don't have to sell for a high price.
If someone has a really high mortgage amount
on their property, they really have no choice
but to require a much higher asking price,
in order to satisfy that mortgage balance
and pay it off when they sell.
Another really common reason for motivation to sell,
is basically, people who are sick,
or people who have family members who are sick.
So if you talk to a motivated seller
and they mention that their spouse, their parent,
or another family member is sick,
this is just, frankly, an indicator
that things may be tight, financially,
and they might be in need of some quick cash,
and they're not in a position where they can sit around
and wait for the highest asking price.
They need to sell this thing now, and they need cash,
and you can be the one to help them with that.
And you'll also probably find,
in the course of doing business,
that some of these people just have high,
or even past-due, medical bills.
So if a seller has a past-due,
or expensive ongoing medical bills
because of an ongoing health issue,
this can be a telltale sign that they need some extra cash,
and they need it fast, to ease that pressure.
And having a huge house, or really any kind of property
that they're not using,
is not something they can afford to sit around
and hang on to, they need to sell that thing quickly,
and you could be the perfect solution to that problem.
One of the all-too-common reasons
that people are highly motivated to sell their real estate,
is when you're dealing with tired landlords.
Finding people who are just, frankly, tired
of dealing with tenants, toilets,
fighting the never-ending battles of property management,
are a great target for motivated sellers,
because a lotta the times,
they just want out of the property, at all cost.
They've had it up to here,
they just can't take any more of it,
they don't know what they're doing,
and they just wanna cash-out
and offload this problem to somebody like you.
It might just be so they can get their cash back
and reinvest it into a totally different business,
or investment venture,
or simply to just get their investment out
and to leave real estate altogether
because they're just so mentally exhausted
from the problems of owning rental properties
and trying to manage them, themself.
So when you're looking for these tired landlords,
one of the simplest ways to find them,
is by targeting properties
that have recent eviction court records.
So eviction is a super-painful process,
especially when somebody
is really invested in their property,
and they actually know the tenants,
and they've been trying to manage it themselves.
And a lotta times,
when a landlord finally gets
this delinquent tenant out of their property,
and they get the property back,
it's gonna be pretty messed-up and distressed,
if not totally destroyed.
And this can be a really difficult experience
for a lotta landlords.
And you'll find that a lotta times,
they just wanna get rid of the place.
They don't really care about squeezing
all the possible cash out of it,
they just want the problem out of their life.
Another subset of people,
that has a really high likelihood
of wanting to sell their property very quickly,
and usually at a discount,
is people are are recently divorced.
So, obviously, a partnership gone bad can be pretty ugly
and it's just magnified when that partnership
is an actual marriage.
If a married couple owns a property,
and they're divorcing, there's a pretty high chance
that they'll be wanting to sell that house,
and sell it fast,
to pay for moving expenses, court costs, lawyer fees,
and pretty much just saying goodbye to a lot of bad memories
they have associated with that property.
So, as tragic and as heartbreaking as a divorce is,
the reality is, this is another opportunity
to get properties at a huge discount.
Another pretty common trait
of highly motivated sellers
are people who are absentee owners,
which means, they don't actually live
in the property that they own.
So, as simple as it may seem,
when somebody owns a property that they don't live at
and they rarely ever see,
this, by itself, makes it much more likely
that they're gonna be willing to sell that property
at a discount, especially if that property is vacant land,
and/or, if it's already distressed
and destroyed in some way.
The fact of the matter is,
this property is not the roof over their head.
And when the property owner doesn't actually depend
on that property for their housing,
and they don't have nearly the same
kind of emotional investment tight up in it,
it's a lot easier, and more convenient,
to say goodbye to that property.
Now it's worth noting,
there's different degrees of absentee owners.
You have the out-of-state owner,
and these are, statistically, the ones who are mostly like
to sell fast and at a discount,
because they don't just not live at the property,
they're like a long ways from the property.
It's actually difficult for them to show up in person
and see that property, on a regular basis.
So, it's one of those out-of-sight, out-of-mind, things.
You've also got people who might live in the same state
but they are not in the same city, or county,
as that property.
So even though they're a little bit closer,
it's still not easy, or convenient,
for them to drive by, on a daily basis,
and see that property.
And then, of course, you've also got absentee owners
who actually do reside in the same city, or county,
as that property.
And while they're definitely still absentee owners,
they probably are a lot more aware of what's going on there
because, you guessed it, it's not that hard to drive by
and check-in on that property from time-to-time,
assuming they're not there every day,
because they're a property manager
and they're managing that thing themselves.
As you can probably imagine,
another really common reason for motivated sellers,
are when people have money problems.
I'm talking about people who are in bankruptcy,
people who might have delinquent taxes,
people who might have back-due HOA fees,
people with past-due mortgage payments,
people with past-due car payments,
or payments for other random things.
All these situations, and money problems,
can be major sources of motivation,
and just really helpful ways
for you to find motivated sellers for real estate.
Another fairly common reason for a motivated seller
is when somebody owes a lot on their mortgage.
So, if somebody owns a property with a mortgage balance
that is far higher than that property's market value,
then, typically, their only option for selling
is through something called a short sale.
And you'll actually see a lot of these happening
whenever the economy is tanking,
whenever the real estate market is doing terrible,
if property values are taking a nosedive.
So in a short sale, the bank will, essentially,
have to agree to accept a mortgage payoff that is lower
than the actual mortgage balance that's owed to them.
Because for the bank,
even though they're gonna be losing money,
it's a lot less of a hassle,
than going through the foreclosure process,
owning your property,
and trying to recoup the money by reselling it themselves.
In a short sale, the bank and the seller
will negotiate how much the bank is willing to accept,
and then will settle on that deal.
And a lotta times, if you're the investor
and you get involved,
you can actually be the beneficiary of that great deal.
Now the downside of a short sale
is this can chew up a lot of time
and be a pretty big hassle, in some cases.
A lot of real estate agents hate short sales,
because it takes forever for them to close on the deal,
if it closes, at all.
So if you're talking to a real estate agent,
you may even find them like intentionally trying
to steer you away from short sales that come up.
However, if you know how to deal with it,
and if you have the right legal professionals
who can help you navigate through this,
it can totally be worth it, in the long run.
This can be a great opportunity
that a lot of other real estate investors will miss
or intentionally avoid altogether.
Another way to find great deals
from somebody who has very little equity,
or no equity in their property,
is buying it, subject to, the existing mortgage
and taking over their financing.
Now, this can be a little problematic
because a lotta banks will have
something called a, due on sale, clause
that gives them the right
to demand the entire outstanding loan balance,
if the person sells the property.
But if you're willing to try
and renegotiate that with the bank,
or if you're lucky enough to work with a lender
that doesn't have this, due on sale, clause,
it might worth it,
because you can gain ownership of a property,
with little, to no, money down, in some cases.
And if that lender is willing to look at you,
and if you actually look better,
and more credit-worthy
than the person who had that mortgage, originally,
it can totally be feasible
for you to just take out that financing
and jump into the place where they left off.
Another great source of motivation
is when you're dealing with inherited properties,
or properties that are in probate.
So when somebody dies
and they leave their property to their heirs
as their inheritance, a lotta people think
they're doing their kids, or their heirs, a huge favor
by leaving them all this real estate.
But in a lotta cases,
it actually ends up being more of a problem, than anything,
because if a property is distressed,
or maybe it has troublesome tenants
who aren't paying, a lotta times, these heirs
that inherited the property,
are gonna have no idea what to do with it, how to manage it.
They probably never even wanted the thing
in the first place.
They just wanna sell out and get fast cash
and that's where you come into the picture.
Even if the property is perfectly clean, pristine,
and vacant, it's still a big job to get a property sold,
especially if the market isn't great for selling
at that particular time.
And worse yet, if the parents died
without a will, or a trust, in place,
the kids are gonna have to sort out all kinds of junk
through the process of probate.
And if you can build a relationship,
and a walk through this process, with the seller
and act as more of a trusted advisor,
it can be a great source for a lotta deals,
if you have the time, and the patience,
to deal with that whole process.
A lotta times you can find these situations
by searching your county records
for all the recent death certificate filings.
Likewise, if you ever come across an estate sale,
there's a halfway decent chance
that this is happening in conjunction
with the sale of real estate, in some way.
So that could be a little flag, or indicator,
that you should keep your eye out for a property
that might be selling soon.
There's also some data services, like ReboGateway,
that specialize in filtering the list,
specifically for these types of situations.
So, if you are using direct mail,
that could be a great service worth checking out
because it'll sort of fill in a lotta these gaps for you,
and help you find some of these people
with just a few clicks of a button.
Another great source of motivation, has to do with crime.
So, if somebody has committed a crime at a property,
and it's actually in the public records,
this can be a super-strong indicator of motivation.
Because, understandably,
there's a pretty big negative impact
on the average humans' emotions.
So, some of these crimes might be like really, really severe
and some of them might be fairly harmless.
For example, maintenance and compliance liens.
If there's a lien against a property,
whether that's put on there by the city,
for lack of compliance,
like keeping the lawn mowed, for example,
or a maintenance lien put on it by a general contractor
that didn't get paid, whatever the reason is,
targeting properties that have liens against them,
can be a great way to root out motivated sellers.
Properties with liens are a lot harder to sell
because liens will encumber the property's title.
And if owners don't have the financing
to pay off these liens and get them removed, you,
as a real estate investor,
can offer a huge solution to this issue.
Because you cannot only pay off these liens for them,
in the process,
but you can also get a really good deal
because you're going through the trouble
of connecting these dots for them.
Now, turning over to the severe crime side of things,
let's talk about people who are either in prison,
and their family members are stuck on the outside
with little, to no, income,
or people who are facing a prison sentence.
If a person is facing a prison sentence,
there's a pretty good chance
that they're gonna have lawyer bills that are piling up,
potential fines that they're gonna have to pay,
and then worst of all, they're probably
gonna have family members who are gonna lose an income
while that person is in prison.
And all these reasons can contribute to a huge motivation
to sell off anything they have that they're not using.
And you, as an investor, can be a great resource
if you can show up and actually give them an option
to liquidate their property, right now,
so that they have that cash they need.
This is something that, a lotta times, is not possible
with just a conventional home buyer,
because they're not able to move like that (fingers snap),
and they don't have cash on-hand to make this stuff happen.
So, you can be a huge resource to people in this situation.
Along those same lines, if there's a property
where there was a registered crime that took place,
this can be a huge reason for motivation.
Because, basically,
that property is not gonna sell to your typical home buyer.
And because of this crime that took place,
that's gonna mean the property
was either like severely damaged,
maybe even destroyed in the process.
And even if it wasn't necessarily damaged,
there's this negative public perception of that property
because something really bad happened there,
and a lotta people don't wanna touch that type of property.
However, you, as an investor, can see the potential.
You can see past these emotion-driven issues,
and you can show up with cash
and get a great deal on these type of properties.
Another thing to keep an eye out for,
when you're looking for highly motivated sellers,
are properties with clear signs of distress,
whether that be boarded-up, or broken windows,
way overgrown grass, or busted up siding.
Any of those things can be a pretty clear indicator
that this owner, they either don't care about the property
or they don't have the money to fix the property.
And either one of those situations,
can just be a telltale sign that they're willing to sell now
because they can't handle this thing on their own.
'Cause if they could, they woulda done it.
Another really interesting way you can find great deals
that not everybody thinks about,
is pursuing properties that are for sale by owner.
So, for the average person, selling a house
is not something they do a whole lot,
maybe once or twice in their entire life,
and they don't have a full understanding
of the actual skill,
and knowledge, required to sell a property,
especially if the market is really, really slow
and properties are not selling quickly,
it's not something that the average person can just pick up
and do immediately,
because they don't know where to advertise it,
they don't really understand how to do showings,
they don't know how to get good pictures
or write a good listing.
Just a lot of little pieces that go into it
that they take for granted
and just don't realize,
"I'm not actually gonna be able to do this on my own."
And by the time they do realize that,
they're gonna be so burnt-out,
they just need somebody to swoop in
and make the problem go away.
And if you can catch these people at the right time,
it could be a prime opportunity for you to get a great deal
just in buying directly from the seller.
And remember, because you're buying this
directly from the seller, you're not gonna have to pay
any realtor commissions, along the way.
Do some searches on websites like Craigslist,
and Facebook, and other listing websites in your local area
to find these kinds of, for sale by owner, properties.
And keep an eye out for these, for sale by owner, signs
on the side of the road.
I mean, honestly, for all you know,
they could all be in a super desperate place
where they need to sell right now
and they're not able to do it on their own.
And if you show up at the right time,
and present a valid solution for them,
you could get a great deal from one of these people,
so they're always worth keeping an eye out for.
Another often overlooked way
that you can find motivated sellers,
and great deals on real estate,
is not just to look for the, for sale by owner signs,
and listings, but also, for rent by owner.
Remember those tired landlords I was talking about earlier?
A lotta times, this is exactly where you can find them.
A lot of self-managing landlords are burned-it,
they're just sick o' dealing with tenants,
and when you see one of these,
for rent by owner, signs or listings,
they can be great opportunities to find motivated sellers.
Even if they aren't actively thinking about selling,
and trying to sell their property,
just presenting an offer to them,
could get the wheels turning,
and help them to realize like,
"Yeah, I actually kinda do want outta this, right now."
This can be a super effective way to find deals
that nobody else sees, just because you're looking
for the right signs in the market.
So thanks for sticking with me.
I know this is a long video,
but I hope you're getting a couple key takeaways here.
First of all, there are a ton of reasons
why a lot of people out there
aren't just willing to sell their property
at a super low price, they're happy to do it,
because they've got a big, huge problem in their life,
this property's in the way, they don't want the real estate,
they do want the cash,
and you're the person who can make it all happen for 'em.
So, I don't want you to be, at all, timid or shy,
or think that there aren't deals to be found out there,
because they are all over the place.
They're in your backyard, they're in my backyard.
You just have to know where to look
and why these kinds of motivated sellers exist
in the first place.
So, thanks again for watching.
I hope you learned a lot from this one
and we'll talk to ya' in the next video.
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