Tapping Landlords As A Source Of Motivated Sellers
Are you tapping into landlords as a profitable source of motivated seller leads?
The search for real estate leads and deals is on. Profits may be rising, but in some cases competition is too. For many real estate investors the answer is found in finding motivated sellers. Foreclosure auctions and banked owned REOs are being hit up hard. So, are landlords a good source of motivated seller leads? If so, why? How are they motivated? How do you find them, and help them?
What’s a Motivated Seller?
The reason that motivated sellers are so highly prized and heavily sought after is all about urgency.
Motivated house sellers have a strong sense of urgency. That means serious decision makers to deal with. It means leads that can be converted to closings and cash faster. It also typically means more flexibility in negotiating price and terms.
Landlords as Motivated Sellers
How could a landlord be a motivated seller?
- Bills and Big Cash Needs
Anyone can run into a need for bigger lump sums of cash. That may be bailing out another business, medical bills, kids’ college tuition, divorce, or other debts becoming due. Rental properties can be great. Though they tend to deliver smaller amounts of monthly cash flow. An owner may not want to or be able to complete a cash out refinance. They may really need to sell.
- They Messed Up
Maybe they just messed up the numbers really bad. It is becoming quite common than people are rushing into real estate, without any education, except for a couple episodes of ‘reality’ TV. Then they find they overpaid, spent too much on the rehab, got a bad loan, can’t rent it for as much as they thought, and run out of money, or have a negative cash flow situation. They really need help, fast.
- Aging & Damaged Properties
Whether it is old age, fires, storms or floods, properties can often require some serious rehab and updating, if not replacement. These deals can be great for house flipping, wholesaling, or a new landlord or builder with more time, expertise, or cash. They may be just too much work for an owner who has held them for a long time, or doesn’t have the money and creativity to get it done.
- Tenant Trouble
Either failing to attract tenants, or attracting tenants that don’t pay or are a nuisance can create motivated seller situations. Sometimes an owner just needs to exit the deal and let someone else handle it. New management and a new owner-renter relationship can change these dynamics.
- Association Issues
Perhaps the landlord rented out the place using Airbnb when it was against the association and city rules. They could have big fines or legal problems because of it. Or there may just be personality clashes between neighbors or the association and the current owner. Those challenges normally escalate, rather than improving. Both sides will be eager to see a sale happen and a new owner come in.
- Accidental Landlords
There are many accidental landlords in America. Some inherited properties they don’t want to manage. Others had to move for a job, family, or cheaper living, and would love to get rid of the property and free up their credit.
- Portfolio Restructuring
Investors are constantly restructuring their portfolios. They may have a really juicy acquisition opportunity on the table and may need the cash from this sale to close on it.
Why You’ll Love Working With Landlords
Why are landlords a great choice of leads? Unlike regular homeowners or big banks, they can be easier to work with. You don’t have all the hoops and layers, and awkward rules of working with a loan servicer or bank. Landlords also understand the fundamentals of investing, and the investor needs and process. These are make sense deals without the emotional hassles and mess.
Where to Find Them
Where do you find these motivated seller leads?
- In your local neighborhood
- Searching for out of area and corporate owners in county public records
- Craigslist
- The MLS
- Via the SMART Suite System
Summary
Motivated sellers can be one of the best sources of houses, duplexes, and condos to buy, flip, and wholesale. Landlords can be a particularly great type of seller to work with. Many can be highly motivated. There are easy ways to find them, if you know where to look, and have a good system.