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This article is about finding house deals and helping home-owners that need to sell their house fast. There are many reasons why somebody might need to sell fast. I won’t be talking about why people need to sell quickly, rather sharing strategies on how to find these people.
If you are in the fix/flip business, finding and working with distressed property owners directly can help eliminate significant costs associated with “finding deals”. Namely, I am speaking of agent sales commissions or wholesaler fees. Of course, many of the techniques to identify sellers do require some marketing expense. Here I would like to provide ideas on how you can find distressed properties, while helping homeowners that are in a situation to benefit from a cash buyer.
If you are on a budget, there are many techniques that require more time and less money. Driving thru neighborhoods and writing down distressed looking properties is a start. Typically there are on-line resources that allow you to plug in an address or APN number to identify the homeowner is. Armed with a name and address, you can mail a letter stating that you buy houses for cash and are looking to buy in their neighborhood. You can create “I Buy Houses for Cash” signs from your own materials (or buy them from companies like www.cheapsigns.com). These ”bandit” signs are almost always effective at getting your phone to ring from all types of people. It is a little like finding a needle in a haystack, so be patient. Placing door hangers on pre foreclosure homes is another economical option (door hangers are very inexpensive to get printed). Title companies and other list providers can provide the addresses of “pre-foreclosures” in your area. Craigslist (although often frustrating to use) can be a source of “for sale by owner” sellers.
If you have a larger budget, the time-tested technique of sending out direct mail to various segments of homeowners can be very effective. The most common segments are “absentee owners”, “high equity”, ‘probate’, “pre-foreclosure”, “tax lien” and “code violations”. With the exception of code violations (which are obtained from local building departments), these lists can be obtained from title companies (you may need to call a few before you find one that will help) and list providers, such as www.yellowlettercomplete.com, www.listsource.com and www.yellowlettermail.com. In very hot markets, like where I am from, you may need to allocate significant funds to be successful. I recommend sending out a minimum of 1000 letters or postcards a month AND mail it to the same list for a minimum of 3-4 times (space out your mailings every 4-6 weeks). I have found that anything less will probably have a low probability for success, and therefore, direct mail may not be for everybody.
Regardless of the technique you use, the real key is follow-up. Most investors give up after they are first told no or don’t get a response. The key is being consistent and persistent. The common wisdom is that it can take up to 7 touches before somebody responds to your marketing message. Now you can see why persistence is so important.
