Motivated sellers present huge opportunities for investors to strike great real estate deals. So for most real estate investors, the million-dollar question is “Where are the motivated sellers?”. In order to answer this question, you must understand the different types of motivated sellers.
You have to know who they are, what kinds of problems they are going through, what makes them motivated sellers, and what kind of help they need.
Here are 7 types of motivated sellers in today’s market:
1) Sellers With Distressed Property
People with distressed property are one of the most popular types of motivated sellers. Even though there’s no foreclosure crisis going on, lots of properties are still facing foreclosure. The owners of these distressed properties are very motivated sellers. They are probably behind on their mortgage payments, or they may already be facing foreclosure.
Depending on your state, you may have enough time to get great deals from these properties. In Texas we have only 2 weeks from the foreclosure notice to foreclosure.
Target people whose property is in default or is just about to default. These include people that are facing divorce, bankruptcy, job loss, relocation, those who have been sued, and so on – they are motivated and certainly looking to sell quickly. Our Free Ebook will help you target these motivated sellers.
2) Heirs Of Inherited Property
We are currently in the middle of one of the biggest wealth transfers in history. Trillions of dollars are being passed down, especially in real estate, from baby boomers to their family members. However, things have changed with the new generation – they don’t love the idea of staying on farms and maintaining these properties, and many don’t want to be tied down to these old homes.
Most of them want to cash out and going on to live their affluent lifestyle without the real estate burden.
You can target probate leads from your county court records. These leads will give you some of the best real estate deals.
3) Sellers Of Damaged Properties
There’s no shortage of natural disasters these days from hurricanes, tornadoes and major storms. Recently. we’ve suffered a surge in storm damage to properties in the U.S. While some are destroyed, others need repair. Further, lots of home owners are still dealing with compensation issues from their insurance to federal disaster relief.
Still, others are tired of living in areas where they keep getting hit by these storms.
These people have become very motivated sellers and they are ready to sell well below market value.
Empathy is key when you’re dealing with these sellers. They just went through a major loss of their equity to a natural disaster. Therefore they need kindness and understanding to help them through these hard times.
4) Aging Home Owners
There are lots of aging home owners looking to sell their properties today. Maybe the house has become too big and expensive to maintain. Probably they own multi-family properties and they can’t keep up with maintenance. Or they just need to cash out and move to a nursing home or assisted living facility.
These homes will have some substantial equity, and probably need repair, hence making it hard to sell through a Realtor. As a result, they’ve become motivated sellers whose priority isn’t just to net their accumulated equity. If you can find these sellers and create a win-win, you’ll get some great deals.
Be understanding and kind when dealing with these sellers. While your offer may work for them, they also want to know they’re not being taken advantage of. Being open about your costs such as repair, holding costs and eventually selling at a discount will put them at ease and get you a great deal.
5) Struggling Investors
It’s great to see a lot of people venturing into real estate investing. Some have made a lot of money and a decent living, while others have not been so successful.
Maybe they rushed in to invest in real estate without educating themselves first. Probably they watched a few episodes on TV or YouTube, and don’t know how to run their numbers properly. As a result, they quickly find themselves with no money and holding properties they can’t sell or rent.
Or perhaps their “fix-and-flip” project didn’t quite work out as planned.
These investors are motivated sellers and need help to offload these properties.
You can find these investors through networking in your local real estate meetings. Search on Google, Facebook or meetup for groups around you. Then strike up conversations in person.
6) Retiring Investors
Another group of real estate motivated sellers are investors who are ready to hang their hat. Some have been investing for years, and the just can’t keep up with their current strategies. Some have rental properties they’ve managed for years, and they just can keep up any longer.
Or perhaps they just need to cash out and travel the world, or pay medical bills. Still, some see an opportunity with the low interest rates that’s enticing to property buyers.
Either way, by finding these motivated sellers, you’ll get yourself some great deals.
Likewise, you can find these investors through your local REI meetings.
7) People Who Have Lost Their Jobs
While America has recently seen one of the lowest unemployment rates in history, others have just lost their jobs in record numbers due to the corona virus pandemic. As of this writing, most mortgage lenders are offering forbearance for 3 months, which may be extended up to 12 months.
At the end of the forbearance period, these home owners will have a big lump sum to pay, or their mortgages will need to be modified. Either way, if they don’t get a job where they can afford their mortgage payments, they’ll become highly motivated sellers who have to sell fast!
Keep your eye out for a surge in these opportunities.
Since not much business is going on today due to social distancing, it might take a few months until you can access these types of sellers. I don’t expect an instant surge of job opportunities after this phase is over, so definitely look out for highly motivated sellers!
Other Types Of Motivated Sellers
There are still many more types of motivated sellers out there – such as
- People delinquent with their property taxes
- Banks in possession of REOs – these are expected to rise after the job losses caused by the corona virus
- Couples expecting a baby
With the categories above, you have a great place to start digging in, finding motivated sellers, and getting some profitable deals. Once you get to know these sellers’ motivations, you’ll know what moves them, and how you can help them and make some great deals.