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Finding Motivated Sellers: The REAL starting point in Real Estate

By Edited Oct 14, 2016 0 0

Nothing matters until the you are talking to a Motivated Seller!

So, how do you find them?

It is absolutely amazing how many millionaires got their start in Real Estate.[1]  Or, once they became wealthy, they discovered the incredible leverage available in the real estate markets where the capacity to buy low and sell high is amazing and, overall, appreciation is consistent.[2] The best part about real estate investing (NOT real estate speculating) is that ANYONE can play the game… anyone. You don’t have to be “bank-rolled” or obtain a university education. Don’t get me wrong here. You DO need an education, but it does not have to take four years of your life in a classroom and the resulting educational loans which burden so many college and university graduates.

Bottom line, volumes of FREE online information are at your fingertips via forums, how-to sites, video sites, etc. Virtually anyone, as long as they can read and write English, can learn how to buy and sell real estate- whether to hold for long term growth or for quick, transactional cash to pay TODAY’s bills. When I began investing, there were few online resources, and the experts in the industry were in the business of selling courses and bootcamps—translating to THOUSANDS of dollars in material and instruction in order to learn their special millionaire maker “secrets”.  Secrets?  I have spent the money and been to these costly courses and bootcamps, and I have found that there really are no secrets. The practical techniques and business organization skills do vary, however it is the SAME basic information.  In my opinion, if you are spending thousands of dollars on a 3-day event/bootcamp in order to learn how to buy and sell houses, you are likely wasting your money.

You do need education, but you can find that online—from writers like me: for FREE. However, what you cannot find online is what I like to call “gumption”[7]. I find that, regardless of personality, every successful investor has a deep internal drive or motivator that pushes them to take risks. I don’t mean risk of losing money, necessarily. More often, risking your pride or comfort are even greater factors. Every successful investor I know is teachable, persistent, willing to get uncomfortable, not intimidated by the unknown, and maintains an overall positive outlook. They are not afraid of discomfort, whether with process or people. In fact, they learn to expect and embrace discomfort and awkwardness, learning that both do fade with time and experience.  Before long— they become a “pro”.

This holds true really with ANY endeavor—but we are discussing real estate. So, let’s skip the philosophical rant and just assume you have all of the above, but you only need the training and education. What is the bottom line? Where do you start?

Well, if you want to be a realtor (no thanks), then go to realtor school and get licensed. Yeah.

Special Note to Realtors: If you are already a realtor, then you know that most folks in your profession (MOST) make peanuts for income. Even some that hustle only make an average living. That is, until they figure out that their brokers make more money. Those realtors usually end up owning their own office and often delve into actual investing themselves.

Hmmm… you mean that being a “realtor” is different than being an “investor”? Yes. Absolutely. Although, these designations are not mutually exclusive.  A realtor CAN be an investor and an investor CAN be a realtor. From my experience however, most realtors would never think of becoming an investor, or “principal” as it is called in the transaction:  they are trained to think that all this investor stuff is “way too risky”.

Realtors “list” houses on the Multiple Listing Service (MLS)[6] and conduct marketing campaigns on behalf of the owner (or that is what they are supposed to be doing)  in order to sell the home and earn a commission. They are highly regulated by the State and are required to use only Realtor Board approved contracts and paperwork.

Investors actually “purchase” houses or have an ownership interest in a property. Investors will buy the house, repair it, and then re-sell it—hopefully, as fast as possible in order to minimize holding costs. Holding costs include utilities, loan payment if mortgaged, maintenance, security, etc.—namely, the costs they incur while “holding” the property before re-selling. This type of investing is known as “rehabbing” and has been popularized by entertaining shows like “Flip This House”[3][4] and “Flip Men”[5].

Quick turn, transactional investors are often referred to as “wholesalers”. As the name implies, they acquire the house at a deep discount and then usually pass the property on to another investment entity (Corp., LLC, Trust, Private Individual- usually rehabbers) who in turn fix the property and either retail it for immediate cash profit or rent it out for passive income. The wholesaler makes a quick cash assignment fee at the closing. In fact, I know a wholesaler who never even goes to closings anymore, the title agency just sends him his check in the mail. Nice and tidy. Their profit margins are less, but they have no risk- no cash investment and very little time investment.

Many investors will do a little of all three: buy and hold, rehab and retail, and just wholesale to another investor.

Popularly and practically, the easiest and fastest way to start in real estate is as a wholesale investor…not a realtor. The education costs, licensing requirements, fees, and dues required to maintain a realtor license become very discouraging to those with limited capital and resources.  However, as an investor armed with “gumption”, an honest real estate attorney, and an ethical title agent—all you need to do is FIND a good deal, get it under contract, and then either sell the contract (called assignment of contract) or close on the property with an equity based loan, with intention to quickly re-sell. Another reason to start as an investor/wholesaler:  the profit margin and potential are much higher than the standard commission rates that realtors are subject to.

My perspective and background is that of an investor. However, the bottom line we mentioned earlier remains the same for both a realtor and investor/buyer.  The actual “starting point” is very simple for either professional. It may not be easy, but it is VERY simple.

The Starting Point of any successful real estate business, realtor or investor:  FINDING DEALS!!!!

What is a “DEAL”? I define a deal as a transaction in which you CANNOT lose. That is, you buy the property so low, with so much margin, that even if you had to wholesale at 50-60% of the after-repaired value, YOU WILL STILL MAKE MONEY. Also, a TRUE deal is mutually beneficial—there are no winners and losers—JUST WINNERS. The seller wins because they get a quick closing for CASH, you win because you found a great property to pass on to your buyer at a tidy profit, and your buyer wins because they got a very fair price where they can make money whether they hold it as a rental or retail it for cash. EVERYONE WINS… that’s what I would call a “deal”.

So, how do you find these amazing deals? By finding sellers with real estate who are willing to take a deep discount in order to move the property quickly. These sellers are motivated, and their motives vary. I will discuss these motives and how to assess them in my next article.

How do you find these “sellers” that are highly motivated to liquidate their property asset?  In the game of real estate, this is called “the chase”. However, there are many ways to get these people calling you, and, frankly, that is all that matters in the beginning.

Nothing matters… not contracts or how a closing works or ANYTHING… until you have the ability to locate these motivated sellers (or preferably have them locate YOU!) on a regular, consistent basis. Without fresh “leads” of motivated sellers with marketable property, you don’t really have a business, and it won’t matter how well you can fill out a contract or network with investor-buyers. If you don’t have anything to sell, no product… you have nothing.

So… in my next article, I will start at what I believe is the REAL beginning of a successful real estate business: Finding and Attracting Motivated Sellers of Marketable Real Estate



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  1. Martin Thomson "Eight out of Ten Millionaires surveyed made their Fortune in Real Estate." www.zeromillion.com & www.ezinearticles. 31/05/2013 <Web >
  2. LORIE KONISH "Millionaires Saw Most Investment Gains Last Year: Morgan Stanley Survey." www.onwallstreet.com. 22/April/2013. 31/05/2013 <Web >
  3. "Flip This House." www.aetv.com. 31/05/2013 <Web >
  4. "Flip This House by A&E." wikipedia.org. 31/05/2013 <Web >
  5. "Flip Men on SPIKE." www.spike.com. 31/05/2013 <Web >
  6. Sarah Siddons "How Multiple Listing Services Works." http://home.howstuffworks.com. 31/05/2013 <Web >
  7. "Definition of Gumption." http://www.thefreedictionary.com/gumption. 2009.

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