Real Estate Investment Strategies: Finding the Seller

Previously in this series we had talked a little bit about how to assign a contract and some different ways to build your buyer's list. In this article, I would like to touch a little bit upon another necessary component of the real estate transaction - the seller. How do we find them?
Current moratoriums and government intervention aside, today's real estate environment offers a multitude of property owners that need to sell their house - fast! No need to use this space to go on about the financial crisis our country is currently facing, I'm sure you are at least vaguely aware of the subprime mess that has pushed default and foreclosure rates through the roof.
This distressed landscape provides abundant opportunity for the savvy real estate investor because there are a lot of people that need your help.
While these are certainly unique financial times, personal and financial distress will occur any time and in any market. The goal to becoming a successful investor is to set up your system so that your business flourishes in all markets - that's right, I did say system.
Like any other business - if you are serious about building a long term successful real estate business then you will need to focus on systems, not money. While my business runs efficiently through the systems I have created, my main driving goal in this business is to help people. The more tools I add to my belt, the more options I can offer sellers that felt they didn't have any options left.
For those that watch late night infomercials claiming that you will earn a pile of money within a week, take heed: those late night methods are ineffective and hurt the reputation of the serious real estate investor. The creation of an effective business model that will provide true value for your customer will take a lot more than 3 easy payments of $199...
Instead of looking for get-rich-quick advice, why not start your real estate investment career with a solid foundation - how about obtaining a real estate license? You will find that your local MLS is the best way to evaluate property and another avenue in which you can help people sell their property. As a broker, I can list the property on the MLS if the seller has time to wait for a retail buyer, but if time becomes an issue, I can slip my investor cap on and find a solution that better meets the seller's needs.
Now back to the topic at hand...How do you find sellers that may need your help selling their property? While certainly not a complete list, here are some of the types of sellers we like to help:
Sellers in Pre-foreclosure: I have found that this type of seller is overwhelmed with mail from all walks of life. Rather than becoming one more postcard in the pile, I have just implemented a door knock/leave packet campaign in order to differentiate our company from others. Among all of the types of sellers we market to, my cost per lead is the highest with this group.
Sellers going through Bankruptcy: This group is usually a smaller mailing list than the pre-foreclosure list, but the response rate is higher. I look for those that are in Chapter 13 bankruptcy (debt repayment over time) rather than Chapter 7 bankruptcy (liquidation of assets to pay debt) because they may still have the opportunity to sell their property. My cost per lead here is much lower than the pre-foreclosure group.
Sellers with Inherited Property: In my area, I have found this group to be overlooked by a lot of investors. I suspect that might be because there is some extra labor involved. I use a list to first find the case/docket number then I go to the court house to look up the docket number and find the address of the administrator.
As with any type of marketing, be sure you measure your response rate and adjust as needed: Successful Marketing = Implement/Track/Adjust
Remember to continue building a professional team around your core business. This means you need to get out there and NETWORK! Attorneys, mortgage brokers, appraisers, contractors, and real estate agents are just a few of the professionals that you want to associate with.
As knowledgeable as you may be, you certainly cannot help everyone yourself all the time! Once your team of professionals is in place, use their specific skills to help your seller find a solution to their issue: your professional network will appreciate the business and your seller finds help with their problem - after all, isn't that why we're in this business?