Most beginners are taught to focus on wholesaling. It’s simple in theory. It doesn’t require much (or any) start-up capital, requires little to no experience and has the potential to put large amounts of cash in your pocket quickly. In other words, it’s sexy.
But the glaring problem is that the competition is so fierce that the good deals are practically impossible to find.
Wholesaling for beginners sounds good in theory, but they quickly realize that they’re chasing deals that both experienced and other inexperienced investors are chasing. This results in a bidding war, which then results in either an experienced cash buyer getting the deal or an inexperienced cash-rich investor paying to much for the deal. Either scenario brings most wholesalers to a screeching halt…
So, what’s the solution?
There’s more than one solution, but the one that worked for my wife and I, when we first got started with our real estate investing business, was coming up with better ways of finding motivated sellers that no one else knows about. After all, if you can find enough motivated, desperate sellers who need your help, even the newest of new real estate investors can find a way to put a deal together and make some money. It’s sorta like fishing for big fish in a small pond, stocked with big, hungry fish (that no one else knows about.
Just drop the hook with bait on it and reel em’ in…
Finding motivated sellers that our competition doesn’t about has been the biggest factor to success in our real estate career, which now spans almost two decades. If there was one piece of advice that I could give to new, aspiring investors, it would be to find a way to reach motivated sellers before your competition even knows that they exist. And, if you can’t figure out how to do that, then find a way to stand out from your competition once you do contact the motivated seller. If you can reach them before your competition, you’re the only fisherman with a line in the water. If you can’t find them before your competition, at least make sure your marketing message and offer stand out from the competition (in other words – don’t just mail a postcard that says “we buy houses” and expect the phone to ring). This one tip alone will multiply your profits exponentially.
But, How Do You Find Motivated Sellers Before Your Competitors?
We’ve tried it all and found a couple things that consistently work. One way is by advertising on TV, and while it’s cheaper than most people think, it’s still not for those of you who have little to no marketing money. The next best way that we’ve found is to contact homeowners who are about to walk away from their houses. We reach them just before they vacate, and we find out they’re about to vacate by using a series of pre-vacancy indicators. In close to twenty years of flipping houses, pre-vacant houses are far and away the most lucrative niche market that I’ve found. No one else knows about these houses, which makes us the only ones with a “line in the water”.
Want more information on where and how to find Pre-Vacant Houses?
