A Little Known Secret to Finding Real Estate Deals

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Finding real estate deals is hard – I can’t find ANY!

There’s nothing to buy out there right now…

There are no more foreclosures anywhere now, where are you guys finding all your deals?

It’s great that you can do all these flips, but I don’t have full-time “property acquisition managers” to do all that work for me…

It seems like every REIA meeting I go to, I get asked these same questions over and over again.

In fact, second only to the “how can I flip houses with no money” question, this is by far the one we hear the most.

Yes, it’s true that I do have a full-time acquisition manager and yes, I do have a marketing team to help me leverage what we are doing in my business…I cannot pretend to write here that I am doing all of this on my own. I simply couldn’t juggle eight property deals right now without the help of everyone on my house flipping team.

But when I was first starting out, I had the very same issues finding real estate deals.

Truth be told about six months ago, I was having the VERY same issues…my deal flow was starting to dry up and I was getting a bit…worried.

When I get anxious…is when I’ve noticed I take the most action.

But you can do it just as easily.

You can find the same kinds of great deals we do with just a few techniques that are super simple. It does take some work and it does take some time, but these techniques will be worth it for you.

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Finding Real Estate Deals With Absentee Owners

One of the best places to find houses to flip or to invest in is through finding absentee owners.

Why absentee owners?

Absentee owners are owners that are most likely out-of-state or out of the area. They may live in that town, but they are likely to not live in the house.

An Absentee owner is an owner of a property that the tax bill is being mailed to a different address.  Be mindful that sometimes this will include PO Boxes, so sometimes you may be mailing to an actual owner. Absentee owner’s lists are a great potential source for deals because:

  • If they don’t live in the area, they may have remote management issues that could be a headache.
  • Many absentee owners are not aware of the market trends in the area and often times may not know what the property value is.
  • They have a tendency to not be as aggressive in the management of the property and as a result may have not raised rents as aggressively to keep up with other expenses such as taxes and other expenses.
  • Oftentimes, you’ll find absentee owners to have less interest in the property and have let the property decay. These kinds of properties are ideal for real estate investors.
  • Many of these absentee owners who call us back after we mail them tell us that they had originally planned to move back to the area someday, but now their plans have changed and they just haven’t had the time to consider selling. If this is the case, we can help them to solve their problems as well as get a good deal for us and them in the process.

Bottom line is this: If you can acquire a list of absentee owners, you’ll have a very solid list of potential sellers who may want to sell you their property and give you a good deal.

But how do you find absentee owners?

The Power of MLS and Absentee Owner Lists

As mentioned many times here on Bigger Pockets, your real estate agent is an extremely valuable part of your real estate investing team. And when it comes to finding absentee owners, this team member becomes even more important to you.

If you have your real state license and have access to MLS, then this is even easier as you can do this yourself.

However, if you don’t have access to MLS, contact your real estate agent and show them the video above.

Here’s how to do it:

1. Log into MLS: Have your real estate agent log into the local MLS and pick a town to search in.  In the video, we pick Plymouth, Massachusetts.

2. Modify Search: Then search “Absentee Owner” on the drop-down menu which is on the left-hand side on the MLS in Massachusetts – for your state it may be different.

3. Select Parameters and Add: In the Advanced Search drop down, choose the properties most desirable for you – example, 2 bedrooms, 2 baths, etc.

4. Hit Search: Once you have your parameters set, hit search. You’ll then see a list of all the absentee owners in that town. For us, it was over 11,000 results. That’s a lot of results. Bear in mind this also includes land owners as well.

5. Transfer to Excel: With MLS, you can separate in state and out-of-state owners by sorting by that column. Download the entire list to an excel file. This file is now your working list of the owner names, property address, mailing address and all the super important information you’ll need to send out your mailers.

This list is the file your real estate agent will then give to you. The rest is up to you.

6. Sort by State Owners: If you can eliminate owners who are living in the state you are searching in – this way you’ll cut down drastically on anyone absentee owners who may have property but live locally. We’ve found that these potential sellers are less likely to be interested.

6. Mail Merge: Take those mailing addresses in your excel spreadsheet then mail merge them in to the Microsoft word mailing template. You can mail merge to print on your address labels or on your letters you send to potential sellers. For us, we use this to print out letters or postcards, but we pay someone to hand write the addresses on the envelope or the postcard itself. We’ve just found our open rates are much higher when we mail with a hand written address on the front.

7. Mail Away: Print out all your labels from the mail merge and slap those address labels on your cards. Once you have all your letters done, it’s off to the post office you go….marketing campaign begun!

8. Rinse and Repeat: Once you’ve mailed to your list, you’re not done. This is because most people will not be interested and most will not do anything to take action until the third, fourth or even fifth mailing. In fact, in the past three months, we have gotten two deals from mailings like these. One on the second mailings we did netted over $35,000 and another on the second mailing which will net us (when it closes), just under $29,000.

Yes, that is profit

Suffice to say, once you do that first mailing, don’t stop. Keep going and keep mailing, it’s really worth it in the end…

Absentee Owners Deal Finding Conclusion

Are the above steps time-consuming? Sure, they are.

This is why you can outsource all this as well. We have a number of places where we outsource this task from college kids to sites like Odesk.com.

And like I said, we don’t stop at just one mailing. We usually mail these leads a postcard once every three months – rotating the towns we are targeting until we uncover the buyers who are ideal for us.

So is it more challenging to find properties now? Sure is. But all that means is you have a work a little bit harder…and a little bit smarter to make it happen.

Chances are, your real estate competition in your area is likely not performing all these steps…but you will be.

If you made it this far, leave a comment below! What do you think? Are there any absentee owner strategies you’ve found particularly helpful? Leave a comment below and let us know!

Photo: Universal Pops

About Author

Mike LaCava

Michael LaCava is a full time real estate investor, house flipping coach and the President of Hold Em Realty located in Wareham, MA. He runs the website House Flipping School to teach new real estate investors how to flip houses and is the author of "How to Flip a House in 5 Simple Steps".

41 Comments

  1. This is an excellent step-by-step. I also look at the column that shows the most recent deed date and mail to owners that have no activity for 10 or more years. This eliminates recent purchases and refinances. The ones who respond have the equity to make a good deal. Also, you can sort for owners of multiple properties. You can then mail them only one card or a letter asking about all their properties.

  2. Great post! We started mailing to absentee and inherited owners earlier this year. I have ha a lot of calls, but no good leads yet. I’ve only sent out two letters so far.

    I wish our mls had those features! I got our info from core logic.

    Do you narrow down potential sellers by equity in their home, time owned or send to everyone?

    • Hi Mark,

      How many different people did you send the mailers to?
      How many times have you followed up with them?
      How long/seasoned is each lead on avg (since you first spoke to them)?

      Are the leads not motivated? Do they not have equity? Do they choose a diff solution? Are they in war zones? What has been the main objection?

      Thanks,
      Adam

      • We send them out to about 500 people( 350 absentee, 150 inherited)
        I just started a couple months ago and we have sent everyone 2 letters. Soon to send out a third.
        I have had probably 20 calls, but most are not motivated. We found a motivated seller, but it was a old commercial shop, turned into a house that had been vacant for 10 years. We didn’t want that for any price.
        I have not followed up with anyone I gave talked to yet. It’s been about 6 weeks since the first people I talked too and none seemed motivated.

  3. jeffrey gordon on

    rotating the towns we are targeting until we uncover the buyers who are ideal for us.

    michael, did you mean sellers above?

    great article sent it to my son in DC to read.

    jeffrey

  4. Jason Johnson on

    Great article! I just pulled a list of absentee owners from http://www.listability.com and came up with 2300+ names. I pulled the list from zip codes that had the highest number of cash transactions in the last 90 days. I will send a postcard first, so I don’t spend the extra postage and costs involved to get back the undeliverable mail.

    I plan on mailing the list every two weeks for at least three months. I am looking forward to the conversations and leads that hopefully turn up a few deals. I plan on wholesaling these properties and after my fourth flip, I plan on partnering with someone on a rehab project.

    If anyone ha undeliverable mail, please contact me. Thanks and I look forward to reading more posts.

  5. This is a great post. I wanted to add a few tips that I picked up in my marketing days:

    1. Apply for a bulk mail permit from your local post office or USPS.com. It’s an up front cost, but will save you money on stamps. You have to mail at least 200 pieces (or 50 lbs.) to use it.

    2. Send something to the same addresses at least once a month and at least 8 times before moving on. After a few months of receiving your mailer people become comfortable and even expect to see it in the mail (like GAP coupons). This is how you lodge yourself into their memory and build trust. Think about Pepsi, or Coke. The more you see their logo and ads the more comfortable you get using their products because you trust them. How often do you drink RC Cola, for example? I’m betting only when it’s the ONLY thing around.

    3. Use the same design each time you mail. The words can be different, but you want them to recognize what they are receiving. This isn’t about tricking them. This is about building trust and rapport.

    4. Don’t forget your CALL TO ACTION! What do you want them to do with this postcard? Log onto your website? Call a certain number? E-mail you? Remember to always put a call to action, “Call this number to unburden yourself!”

    5. If you are doing the postcard I would take it one step further than writing the address by hand and also write a short note by hand and sign it. This should all be done with blue ink so there is no question that it is handwritten. The piece should look professional, but that added handwritten part will let them know that they are doing with a human being and not a huge corporation. Most people are too intimidated to contact a huge corporation. They want to talk to a person.

    6. When creating your mailers make sure you are aiming at how you can benefit THEM and not how this benefits you. No one is going to care that this deal will line your pockets. If they are considering unloading a property there is a reason and they need your assistance. AIM THERE!

    7. This should go without saying but please remember to proofread. Have your friends proofread. Have your spouse proofread. Have your dog proofread. You don’t want to spend all that money on marketing to these absentee owners only to have a glaring spelling or grammatical error. Would you trust someone with one of your assets if they couldn’t spell? I wouldn’t.

    8. You can also get absentee owner mailing lists from Title Companies. They may be reluctant to help you, but your Realtor can definitely get these lists because they send a lot of business to Title Companies and work with them often. It may help if you approach a Title Company that you’ve closed a recent escrow with. If this is your first deal, use the title company that you used when you bought your own house, etc. They can provide you an Excel file (or .csv to use in Excel) or they can print the labels for you and you can pick them up. Ask for “Non-Owner Occupied” addresses in a certain area, zip code, radius, etc.

    I hope this was helpful.

  6. So, can this be done with List Source if you have no access to an agent? Will you be gaining access to the same leads? 🙂 Is there a way to outsource that is extremely affordable? I don’t have even $100 a month to do this until after my first deal!

    • Nichole-
      I have done this since year 2000 and in three states. It is all just numbers. It is important to send to a quality list as in my comment above(You can get free info from your county). In San Antonio Texas I drove a neighborhood and wrote down the addresses of houses that were not in good condition. I mailed 150 post cards including that area and others. I got two calls and bought one house for $26,000 that had an after repair value of $112,000. (It needed about $45,000 of work) The point is, others send large mailings that included that area. But my card is the one that got to the seller at the right time. If you can only send one piece of mail a week, each to a different house, do that. You will get a call from time to time. Along the way you will be getting experience and may buy a house. Doing nothing is the way to get nothing.

      • You bring an excellent point Bliss and thanks for sharing. I like that strategy if you are limited on your budget and want to incorporate some mailings. You never know.
        Taking action is the key no matter where you start and how little money you have.
        Your desire will determine your success more than anything.

        I hope this gives Nichole another option to work on.
        Thanks again for sharing.

  7. Wow Mike this is awesome!!!!!
    I didn’t know that we could actually pull this info and save it so easily out of the MLS.

    No word of a lie, I was starting to compile some absentee owner lists by going to the city assessor website and plugging values into a spreadsheet.
    I probably messed around on that longer getting the NINE records that I finished then I just did downloading 3,343 records for the same city off MLS!
    It is a little annoying that it only lets you save 500 at a time but if that is the biggest issue I’m not going to complain. 🙂

    Though those 9 records I did myself before were in a much nicer format. 🙂

  8. Great article Michael!! You couldn’t have written this at a better time. I’ve recently been looking into sending out letters and now have an avenue to look into in my area. Thanks for the insight.

    • Based on your $100/month max budget from above you probably want to work on something other than direct mail at this point.
      Unless you can borrow some seed money that won’t really get you anywhere.
      Doing all the work yourself (and not having to actually buy a list) you maybe can send out a little over 200 a month.
      Any successful marketer I’ve ever talked to would say you need to be at least in the 1,000 range to start getting traction, and that is if you have a pretty good list.

      I’d recommend putting more effort into really cheap and free things until you can save enough money to make a mail campaign practical.
      – Craigslist Ads (Free, easy, LOW response)
      – Cold Calling (Free aside from phone costs)
      – Door Knocking (Free aside from any gas money to get to the area)
      – Bandit Signs (Not free but you can get a lot farther with these for $100 than you will with direct mail IMHO)

      For cold calling and door knocking you will still need a list of some sort. You might spend your $100 on getting something like that. You can also make your own from public records (Don’t need MLS to access those, this was just a really EASY way to do it).

      Good luck!

        • Sorry Nichole I overlooked your questions. Still playing catch up from vacation.
          I agree with everything Shaun wrote. Shaun does a great job marketing as well and $100 a month for mailing will not work. Let us know how you make out.

          Thanks Shaun for answering Nicholes questions.

  9. Great article Michael, thanks for the advice! I never knew you could go through the MLS to access this information. I’m curious, what type of agreement would you setup with your agent if they are compiling the list for you? Do they charge you for the data or require a commission on any deals you close?

    • Hi Rane – Thats a good question. I am not a licensed realtor so maybe some of the realtors can chime in here. I would certainly offer them the listings after the rehab and that could motivation enough for them to work with you.

    • Hey Rane,

      Tough call on how to try to handle it.
      As an agent and an investor that will work with other agents I always tell them if they bring me a possible deal that they can write the offer for me and they can relist if it is a rehab. In my case there is a level of trust involved on their part since I COULD go around them being an agent. If you aren’t that should not be a major concern for them.

      However in this situation you are going to be marketing for off market things so there isn’t an obvious commission to be made. Just to compile this kind of list I think I would offer to pay them a flat fee (or hourly if you are going to ask for a lot at once) and also say if you get any deals that you would like to have them list the resale.
      Not sure where you are so the local MLS could be different than this example. It may not even have this capability and if it does it may be harder to get the data than this. IF it is similar the agent can probably read your request and get you a list for 1 town/city and send it back to you in less than 10 minutes so if you offered them like $50 or something that is a pretty nice deal for so little work.

      This is for an unsorted, un formatted list of raw data. I’d not ask them to do anything past this. Unless you can filter the search so you can only get certain types of records to start with. Then they just have to do a few more clicks and you could eliminate things you aren’t interested in (Like Raw Land if that isn’t something you are looking for).

      Good luck!

  10. Tremendous article and comments. I always enjoy your blog posts Michael. I have never mailed to AO; however, I think that might be my next list to mail to. I really liked Aggy’s suggestion of some hand writing on the post card. I have always signed in blue ink to give my post cards that little extra something. At least the PC I mail myself and not outsource.

    • I am not sure Judith? Maybe post the question on the forum and someone from that area may be able to answer that. Put the areas in the post so the key word alerts will go to the members in these areas.

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