What is happening YouTube? It's Matt Faircloth. Listen, last week I put a video out. It did
really well because it was talking about foreclosures, and the big question of is there going to
be a big foreclosure crisis in the United States in the foreseeable future? The bottom
line is, foreclosures may not be a good place to go to get deals now, in the next say year,
but foreclosures may be a good place to go in the future.
If you guys want to find good deals now, a better place to look is tired owners. To find
owners that are tired maybe of doing the landlording game, maybe in distress, but also just tired.
I made my money, I don't want to do this anymore, perhaps Baby Boomers or older generation owners
or folks that have been landlording for a good period of time, made what they're going
to make, and now they got a little bit of a fire under their rim, which is this motivation
not because of this. They were tired before and now they're motivated. They're tired and
they're motivated.
These are two methods that I'm going to talk about. If you guys have other ways to find
tired deals I want to see your comments, so leave some comments down below. Watch this
video until the end because although today in the video we're going to talk about how
to find tired owners, at the very end I'm going to teach you guys three different approaches
that you can offer these tired owners to do deals with them. Once you find them what do
you do? How do you talk to them? I'm going to take care of you at the end, so watch the
video and you can get those three different approaches.
Today's video is about finding tired owners. What is a tired owner? A tired owner, as I
said before, is someone who has been landlording for a while and either is in distress or is
not in distress but wants to do something different. There can be owners that are running
out of steam, that are, "You know what? I'm not sure if I want to do this anymore." Maybe
they made good money doing it and they want to retire and move on. Either way, here are
two tactics to find tired owners.
The first one is real simple. You look for properties for rent. This is how my wife and
I got our very first duplex. I'm dating myself but we went and bought ourselves a newspaper,
and we looked in the newspaper and under the for rent ads and we started calling the for
rent ads in the newspaper. We said, "Hey I see you have it listed for rent. Do you have
any interest in selling?" We called over 50 people. We got laughed at, we got hung up
on, we got crazy ridiculous prices, "Yeah sure it's rented for $1,000 a month and I'll
sell it to you for $350,000." Insane. Finally we found somebody who was interested in selling.
The reason for that is, and this tactic I believe works on smaller multi. For rent ads,
for small multi is what you guys want to do. Small multi-single family homes.
The reason why this works is a tired owner is feeling their most pain when they've got
some vacancy on a small multi. Think about it, a duplex, if one unit's missing, if one
unit's vacant, that's half the revenue gone. A triplex is a third of the revenue, do the
math. Maybe not so much on 100 unit apartment building, so this method might not work on
the larger multi because it's expected to have some vacancy on the big stuff, but if
you got a small multi, a one, two, three, four, five family, somewhere in there. One
unit vacant may put you in the red. Meaning that person may be losing money when they
answer the phone. Somebody managing something that small, a lot of properties that size
are owner managed, meaning they're not managed by professional property management company.
For rent ads, that's what you guys want to do. Have the conversation. These people have
a problem you can solve. You want to have compassion. I see you have it listed for rent.
I wish you the best of luck in filling that vacancy, but if you maybe have an interest
in selling I want to let you know that me and my team, whoever your team could be you
and your wife or you and your husband, you and your dog, doesn't matter, are interested
in buying property in that neighborhood of that size. If you're interested in selling
we'd love to talk to you. You're going to get laughed at, you're going to get hung up
on, you're going to get prices that overinflated. You can say, "Thank you for your time. Probably
not going to work for me. If you reconsider that number give me a call. Here's my phone
number." Move on, call the next person.
Here's another great thing about calling for rent ads. You can now look online. You can
go look on Craigslist, you can look on Facebook Marketplace, you can go look on all the places
that properties get marketed. A tired owner might not put a bunch of pictures up there,
they might put one picture, the address, fine, find it. You know why? Because they're tired
and they're not going to put much out there. They might not put 38 pictures of the property
on the for rent ad. You might have to go off it but use the lack of information to your
benefit.
They're not going to have a very good time leasing that property because they didn't
put many pictures up, they didn't put a Matterhorn walk through of the property or a floor plan
up there online or anything like that. They probably went super basic. That's maybe your
more tired owner. Also you can use the data that's there to shop to see if the property's
going to work for you. Well who's paying utilities? Tenants want to know that, owners want to
know that too. For rent ads can be a great source to collect a lot of data on properties
and also a great way to find tired owners.
Here is tip number two, do public research. There's two places you can go to look at this
public research. There's public record. A lot of them have it available online so go
to the public records office or you can go and sign up for an online service like ListSource.
Listsource.com is a good source and there's other resources out there. All they're doing
is going into a public record and building databases based on public information and
they're allowing you to search through their records. You can pay them a few dollars for
their work or you can go do the work yourself.
Here are a few things that you guys want to look for when you're searching public record
finding tired owners. I'm going to go through each one and I'll explain why they matter.
Here's number one, find someone who's owned a property say 15 years ago, who's owned the
property for a long period of time. They bought it before the boom, before things took off.
Even if they bought it for $50,000 a unit and it's now worth $90,000 a unit today, they
might still take $80,000 a unit because that's still a big profit. They might not be looking
for the absolute top dollar if they're tired. That's probably enough time for this wonderful
real estate landlording business to start grating on somebody and say, "Okay, you know
what, enough's enough."
Next thing, this is a big one. Personal name. That's an old school habit, that's something
that was done back in the day, but now thanks to things like bigger pockets and real estate
books and Robert Kiyosaki and everybody else that's out there, it's very not common to
find newer owners buying personal names. If you own a reasonable portfolio or if you own
a multi-family property like an apartment building or something like that, odds are
you don't own it in a personal name in today's world. But if you find an old school owner
who maybe is getting tired. Look to find people that own bigger property in their personal
name.
Look for bigger apartment buildings in the community you're shopping in, so public record,
ListSource and then make that list, that's list A. Then go and cross reference that list
by looking these properties up on Google and Facebook, and if you find any property that's
of that size that does not have something like a Google pin drop, if you're techy you
know what I'm talking about. A Google pin drop is something that's on Google Maps that's
a pin drop that says that property, 123 Complex at 123 Main Street is located right here and
here's some reviews and here's the phone number and here's the website for that property.
If that property does not have a Google pin drop and it's more than 30 units that's a
tired owner. Because the concept of creating Google pin drops for properties and creating
Facebook pages for properties and creating all that stuff is something that's newer to
the market. It seems common for all of us, but for someone that's been in business for
more than say seven, eight, nine, 10 years, 10 years ago that was not a thing. So someone
who's not kept up with the time, God bless them, they're probably still landlording and
stuff like that, but someone who's not kept up with the times has not thought to or desired
to or bothered to. You know what? I'm not doing what those crazy kids are doing, didn't
do that thing.
Cross reference those two lists. Google pin drops and online marketing for their property
really is what that is versus larger multi's that in markets you guys want to be in. Cross
reference that. You're going to eliminate almost all the multi's in your area that you're
shopping in, but I bet you that you might find 5% of them that don't have that criteria.
Those are tired owners.
Now that I've covered the ways to find these tired owners, let me sum it up for you real
quick. Number one, for rent ads. If somebody's got a property for rent they are likely losing
income. For rent ad approach works on small stuff, 30 units and below. On the big stuff,
let's say 30 unit and above, you're going to do the data search and that means you're
going to search public records, you're going to use services like listsource.com and you're
going to go and find these folks that trigger a few of these screening criteria that you
said those are. Bought it 15 years ago, own it in their own personal name, and no Google
pin drop. Search for those things.
There's other things you guys can use to search for tired owners. I am not the end all be
all resource on this. I happen to know those have worked for me, but I want to hear more.
I want to do more deals, so put in the comments other resources, other methods you guys have
used. There's your summary guys, now here's your bonus at the end.
Here are three tactics you guys can use once you find these tired owners. Here's number
one, let's call it the no hassle. No hassle looks like this. "Hey Mr. Seller, Mr. Apartment
Building Owner, love what you've done here. This is a great complex or a great duplex
or a great whatever it is. I'm sure you could go and sell it on the open market, but if
you go and do that you're going to have 15, 20 people walking through. They're probably
going to go and do something called re-trading you, meaning they're going to walk the property
and they're going to figure out that your roof needs to be replaced and they're going
to try and credit themselves for a roof replacement or for other things that are undisclosed that
maybe you didn't even know about."
"They're going to claim that they're going to want a credit in that and they're going
to trample some people through your property and appraisers and all these different people.
I can give you a no hassle closing. You don't have to do all that. I might not be able to
give you the same price that those folks give you, but I can make your life easy and I can
give you a fair price. Might not be the highest price but I'm going to give you a really fair
price. I'm not going to re-trade you. I'm going to close quickly. I'm going to give
you a fair number and you can move on down the road." No hassle.
Number two, the second option is called a cash flow sale. That's what I call it. That's
not what they're going to call it. You need to identify. Maybe one of the reasons why
you're maybe not so open to selling is because maybe you're making X amount of dollars a
month, which that could be funding your personal living expenses. Well I can't take that away.
I don't want to take away your revenue stream that you've been living off of. What if I
can keep that going? I'm going to keep giving you the revenue stream but I'm going to take
the burden of the property, the who's going to cut the grass and who didn't pay their
rent this month. I'm going to take all that away.
What we're really talking about here guys is seller financing, that's what this is.
I'll give you some numbers. Let's say for cash flow they're making $5,000 a month. In
cash flow on the property after all the expenses are paid. Well you might not be able to give
them $5,000 a month, but if you run the numbers you might be able to get a little bit close
to it. Maybe you could give him $3,000 a month, whatever it is. Because maybe there's some
operational efficiencies you can install on the property to make the property make more
money, producing expenses, increasing revenue, whatever it is your game plan is. Maybe you
can afford to pay them some cash flow. It might not matter as much how much it is, it
might matter they get that check and they don't have to do anything. They get a lien
on the property, they get collateral, they get a lot of different things that are going
to protect them and protect their check to make sure that check keeps coming.
That's called a cash flow sale and you want to speak to them in their language. You don't
want to say things like, "Well I'll buy it if you loan me the money to buy it." That's
not the way you want to call it. You want to say, "What if I could buy the property
from you and pay you monthly and send you a monthly check?" Another tactic that I've
heard a lot of people use is, "Well I see you want a million dollars for the property.
Well how much do you need now? Well what if I gave you $100,000 now and the other $900,000
what if I paid you X amount of dollars per month for X amount of years?" That's speaking
it their language. They get money now and they get checks in the mail after that. That
is called a cash flow sale in my language. Think about it and remember guys, this is
a big thing, think about things from their perspective.
From their perspective owner financing or seller financing or can you hold paper and
can you give me a no money down transaction, that all sounds awful to them. I wouldn't
want to do that, but you're going to give me a cash flow sale, that sounds good, I like
that. You're going to write me a check every month? I love that, I love checks. Speak to
them from their perspective. For number three, you got to have the right seller on this one.
If you've got the right seller you could go in and say, "Listen Mr. Seller, Mrs. Seller,
I see you got this property and it's great and I love your property, I really do. I love
what you've done to it. I love the love you put into it, I see you care about this property
but here's the thing."
"Let's both admit this property could use a face lift, could use a roof, could use new
seeding in the grass, maybe could use getting rents up. Hey here's how Google pin drop works."
Explain to them, don't talk down to them, explain, "Hey listen, by the way this is all
this tech can do and I know how to do all that and I'm willing to come in and roll my
sleeves up and do all this stuff. What if we partner up?" That's not really buying the
complex, that's really coming in and seeing if they'll give you equity for some cash.
Maybe you have to buy that equity from them and you get controlling interest in their
property and you go and take the property and you take it to the next level and they
don't have to exit from the deal. What you're doing again, just like this one, you're taking
the pain in the butt off their table.
"What if I can keep writing you a monthly payment and I take all the pain away? What
if I take the stuff you don't like to do and I take that away? Maybe we refinance the property
and I'll guarantee that debt and we pump some more capital into the property." Again, I'm
not going to give you guys all the keys to the kingdom here, you guys watching, you guys
got to figure this out on your own. This isn't everything, these are inspirational ideas.
You guys can take them and run with them, and every seller, every property's going to
be different.
If you find the pain you'll see if you can find which one of these to go into. Okay guys,
those are your three approaches. Those are some ideas on finding sellers. I didn't put
a whole lot on the white board today because I really got into talking to you guys so I
hope you don't mind. Again, leave comments in the comment box on other ways you guys
have used to find tired owners, or even approaches. Maybe there's an approach we haven't talked
today on finding these folks.
To sum up, no hassle, cash flow, and partner up. Those are your three approaches. Take
those down, take the three ways to find tired sellers down and I hope you guys enjoy this.
Again, leave comments, leave other ideas for videos you guys want me to do. Because this
video was only through the inspiration of you guys watching the video that I put out
last week. If you liked what I did last week and you like this one, leave a comment below
too and hey Matt, can you do one on X? Or send me an email to helpme@derosagroup.com
if you guys want to go on the air live with me on every Monday on our Mentorship Monday
program. That's helpme@derosagroup.com. If you guys want to join me on our Mentorship
Monday program live.
Join that. We've got a lot of people that have submitted questions but I need more and
have lots of people join us in that. That's what I got guys. As I always say, have a very
profitable week. Hey guys, thanks for watching this video, hope you liked it. If you liked
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