When you’re first getting into flipping houses, you have to keep your eyes and ears open at all times.
As a house flipper or real estate investor, its wise to be aware of these situations as they may spell opportunity for you as well as help the other person get out a of a difficult situation.
The biggest thing to remember is that if you honestly try to HELP people, you will get it back in spades.
When we get on the phone with distressed sellers, we first tell them, “we may be able to help you solve your situation, but then again we may not be able to. Let’s talk about it anyway and see if we can come to a solution to your problem.”
For distressed sellers, we’ve found this is a welcome approach and we rarely get hung up on.
Plus, if you approach it from THEIR perspective…and show compassion…they will talk with you. And if they talk, chances are you can actually help them.
Yes, we do mailers to probate, old home, out-of-state owners and the like – but when we talk to them, we do our very best to HELP them get out from under ad particularly difficult or challenging situation.
In many cases, that means selling their home “as is” to us instead of a retail buyer. We can close fast, give them good money for their home and then beautify the neighborhood in the process.
And it doesn’t hurt that you can make a few bucks at the same time.
This is one the biggest reason why I absolutely LOVE to flip houses. How about you?
How to Estimate Rehab Costs!
Estimating rehab costs accurately can make or break your real estate business, and it takes years of experience for even the best rehabbers to master the art. However, you can expose yourself to less risk and get more accurate with your projections by learning how the pros think when estimating construction costs.
The “Motivated Seller” Comes In Many Forms
People get into certain situations where they suddenly become overwhelmed, suddenly lose their ability to earn an income or there’s some major life change that occurs in their life.
Keep in mind that there is a very big difference between a motivated seller and a homeowner who is trying to sell their property.
A motivated seller needs to sell their property as fast as possible because they need the cash. The situation may be an emergency or there is some other urgent need.
The typical homeowner isn’t in as much of a hurry and they are willing to wait as long as it takes until they get the best possible price.
Between the two sellers, the motivated seller is the kind of seller you want to speak to because they are far more open to negotiation.
What makes a seller “motivated” instead of just merely “interested”? Although the list is long, these are the five most common types of sellers you should be looking out for. Each of them should be approached ethically, honestly and with compassion.
And if you can do that, you will both help them…as well as help yourself in the process.
1.Unexpected Job Loss
When a person loses their job they can:
- Wait until they find a job as good as their old one
- Look for lower paying job as they wait for something better
Whichever the case, if a person loses their job, they may not be able to spend or afford as much as they did when they had their old job. For this reason, they might not be able to afford property taxes or worst case, their mortgage.
When a person finds themselves in this position, they resort to selling their house and moving into a cheaper one. Their circumstances force them to sell their current house as fast as possible so they are willing to negotiate down.
These kinds of sellers may be interested in selling to an investor who has ready cash and can close in under a week.
If you know how to flip houses with no money, you should have plenty of cash from private investors or even hard money lenders. This quick cash could be just the thing to help this person out of a tough time and onto something where they are more stable.
2. Separation Or Divorce
No doubt, divorces can get ugly and one of the things that couples end up fighting over how their assets should be divided. The house is one of those big assets.
The entire process involves lawyers and plenty of paperwork but one of the biggest assets that many couples fight over is the house.
Many at times, the person who gets the house will try to sell it as soon as possible before the other partner tries to renegotiate. In other instances, the couple may decide to sell the house and split the profits 50/50. If this is the case, the couple might not be speaking to one another and so there is a communication barrier between the two of them.
Whichever the case is, an investor can purchase a house from a divorced couple far more easily than a typical consumer because the couple typically wants to get the process over and done with as soon as possible. If you have ready cash from your private investors, this can help solve these issues for the divorced couple.
3. A Family Expecting A Baby
A couple that is expecting a baby may decide to move out of their small home and move into a bigger home. These kinds of couples simply don’t have time to waste because they need to find a new home before nine months are over.
In between going to doctor’s appointments and prepping for a new baby in the house, many couples may want to sell as fast as a painlessly as possible. Selling their home becomes less important as other priorities take effect.
This is where investors can step in and help. If you can close fast and offer fair terms, the expectant couple can definitely be a great source of potential deals. They walk away with fast cash and you help them out of their newfound situation.
4. Owner Of A Deferred Maintenance Property
Some homeowners sacrifice maintaining their home and instead divert the money towards mortgage payments or other expenses. In most cases, the homeowner may decide they want to sell their home for whatever reason but no one wants to purchase it because it is so poorly maintained.
Poorly maintained properties are potential goldmines for house flippers.
In these cases, the home owner is likely to sell the house to you especially if you are the only willing buyer – all other “retail” buyers are so turned off, you become the only real potential buyer. Ideal for you and for them.
In these situations, you can negotiate the terms far more easily because you may have a slight upper hand. If the house has great potential, in a great neighborhood but is a total eyesore, then these are the ideal kinds of investments for any real estate investor.
5. Owner Of An Old Property
Just like deferred maintenance property, old property is just too undesirable to many retail home buyers. It’s the rare retail buyer who can really see the pearl hidden inside the oyster.
Even if the house has structural problems, you can purchase these types of properties at a very low price.
If you know what to look for and have your general contractor give you estimates on all that’s wrong, you giving them a way out by giving them an offer. But before you purchase the property, you should have it inspected to avoid purchasing something you will end up spending so much just to rehab.
If you’ve come this far, please leave a comment below! What is YOUR best kind of motivated seller?
Let me know what you think below!