How To Target Absentee Owners For Massive Profits In Real Estate Investing
In order for any real estate investing business to remain profitable, it needs to have a constant flow of people looking to sell their houses. Absentee owners are in almost every market and make a big chunk of motivated sellers.
In this article, we discuss how to target these absentee owners for massive profits.A successful real estate investing business needs leads of people who are motivated to sell their houses. Absentee owners are in almost every market and make a big chunk of motivated sellers.
In this article, we discuss how to target these absentee owners for massive profits.
Why absentee owners?
Absentee owners are usually people who own other properties. In most cases, these homes are rental houses, or they bought a second home due to job transfer, divorce, etc.
You should pursue these due to a variety of reasons:
i) Burned landlords
A lot of people become landlords without proper preparation. They realize they cannot make any money with these houses, maybe because they paid too much, increasing their mortgage payments, or they did not pre-screen their tenants, or long vacancy periods.
And they become very motivated sellers.
Just yesterday, I met a friend who is going through a court eviction process with his tenant in Birmingham Alabama. It turns out he pays $200 out of pocket every month to make his mortgage payment! This tenant has not paid a red cent for 5 months.
Since he has a lot of equity in the property, this can be a great investment property.
Most landlords last about 3 to 5 years. This means you can find absentee owners right where you live.
ii) No attachment
Since absentee owners do not live in these houses, they have very little emotional attachment to them. They are therefore easy to do business with.
iii) Lots of inventory
Until a few years ago, about 25% of home purchases were second homes. This means there are plenty of these homes on the market.
How to locate and reach burned landlords
Direct mail is my favorite method to reach motivated sellers. I like to send post cards because they are easy to manage and cheaper. You can get very high response rates if you do it correctly. Details of how to send effective direct mail is covered in a separate article.
You have to narrow down your farm area by zip codes when locating burned landlords. Preferably middle class income areas. The $100,000 and $150,000 range in my market is middle income.
I like to order my lists from melissadata.com. Use the following criteria to narrow down your lists
1) At least 3 bedrooms and 2 bathrooms
2) At least 10 years old
3) Between 1000 to 2500 square feet
4) Single family houses. You can also include duplexes, triplexes, and quads.
Target to buy at least 2000 names. The more you can buy the better. You will receive your list in an excel spreadsheet.
Send them your marketing piece every 2 months for one year.
Most people make the mistake of not following up - most people respond after several contacts. A combination of letters and post cards work well as you see convenient.
When you buy and sell houses for real estate investing , a professional website for buying houses tells your story, pre-educating motivated sellers, and delivering fully pre-screened and pre-negotiated deals for you. For more tips and articles on real estate investing , visit our blog.
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