There are many types of motivated sellers out there that you can contact in order to find the off Market deals that you want for high Equity Investments for wholesale deals.
As someone who is involved in the real estate market, an investor or a wholesaler must know that the most lucrative deals are done off the Market. Being able to find Market deals is essential for the success of Real Estate Investors wholesalers and even agents.
The best way to find these off-market deals that have the potential to make high percentage returns is by identifying, finding, and contacting motivated sellers.
These are individuals who have not yet listed their property for sale, and that are in need to sell their property in order to improve their life situation.
But then the question remains who are the most motivated sellers? And how do you find them? We’re going to answer the first question in this blog, but as to the second question, you can find the answer over here.
1. Divorced Situation
In a hypothetical divorce between two people, there usually is an opportunity to take advantage of these motivated sellers. In a divorce, all assets are usually split including property.
If both parties agree not to live with one another any one party cannot keep the property while the other lives in a smaller abode (although that does sometimes happen). This creates an opportunity for buyers or wholesalers to contact this couple and proposed for them to sell the property very quickly in cash.
Due to the obvious expenses associated with lawyers and other fees that come up in a divorce, it is very expensive for both parties to be divorced and therefore an opportunity for Quick Cash comeuppance is too tempting of an offer to refuse.
As a wholesaler or an investor, you are providing an exit and solution to their current cash problem while you are able to get a property at a discount to gain High equity.
Even though the strategy does seem predatorial it is far from it. This is due to the fact that at some point in our divorce at a later date, the sale of the primary residence of both parties is usually inevitable letting them do it early would allow you to solve their problems earlier. This way they can settle their disputes without the worry of running out of cash anytime soon.
2. Foreclosure Deals
As a side note for foreclosures, this strategy works way better if not ably when the real estate market in that area is in a bull market rather than a bear market. The reason why you should aim for individuals in markets that are appreciating is that they have probably paid down a certain percentage of their mortgage and their house today is worth a lot more than what they need to pay for their mortgage.
On the flip side if you are on a depreciating market and the seller or motivated seller is underwater, meaning that their mortgage is worth more than their property and is expected to be worth less in the near future, then maybe you should try finding other leads for you to approach.
A foreclosure opportunity allows you to offer them a cash offer that is a lot less than what the market is pricing that property with comparables in their neighborhood.
For people that cannot afford their mortgage payments anymore due to their own circumstances and situations, the foreclosure process that will come up on them that will be set on by the bank will take a long time and is very tedious. This is when an investor or a wholesaler that offers cash for their property comes in.
You offer them the solution to get out of their mortgage payments quicker than if the bank does it themselves. This way they can start looking for a home much sooner, he backs the banks very quickly and moves on with their lives without that much hassle.
3. Back Taxes
Now we are looking at properties where the owner has no mortgage on it but is no longer paying taxes on the property. This doesn’t necessarily mean that the property owner cannot afford the tax payments on their home, instead could mean that they have walked away from the property and have not come back yet.
This is an amazing opportunity because the government wants their taxes back on their home that the previous property owner did not pay. This is when you come in by it at a huge discount and assume the backpacks that have accumulated from the property from the previous owner.
Of course, if you are a wholesaler you have to disclose the back taxes to the investor you’re going to pass it on to, but if you are the investor you already know about it. You are going to be able to get the government to finance your property and payments so that you can make a payment plan on the back taxes that have accumulated.
This is one of the most amazing and out-of-the-box thinking leads you can ever have as a wholesaler and a real estate investor. Unlike the previous foreclosure scenario, this lead can work in both up markets and down markets. This is because there is no mortgage to worry about whatsoever.
Of course, this strategy does work if you find a property that has back taxes and also a mortgage but you have to make sure that you are any strong and continuous up Market. Of course, there is a limit to the amount of back taxes you have to find for the owner.
As an example if the owner has $100,000 of back taxes on their property and their property is only worth $70,000 due to a down Market then there cannot be a deal that will be lucrative or beneficial for both parties.
4. Deceased Home Owners/ Inheritance
The opportunity that comes up once a property has been inherited after a deceased homeowner is tremendous. This is because homeowners that have deceased usually have many relatives that need to split inheritance assets such as a home.
If a deceased individual has 16 relatives to split their inheritance money and other assets, due to them not writing a will that specifies who gets what they will most likely eventually sell the property in the open market?
This is what makes these inheritance individuals very attractive leads because they can probably not afford the property taxes and possible mortgage on the homes that have been inherited for them, and they probably do not have aspirations to live in the home of the deceased relative.
This is when an off-market deal can take place between a wholesaler or an investor and the inherited. They can strike a real cash agreement or even a loan agreement that will allow the inherited to exit the payments for mortgage and taxes as well as insurance and get cash for the equity, whilst the investor and wholesaler get the property at a discount.
The additional advantage of deceased owners of the homes is that their home isn’t necessarily in a bad situation. An old person will probably take care of their home and spend a lot on their home in order to maintain its structural integrity and beauty.
Individuals who inherit this property would easily Let It Go for a lot less than what it actually is worth on the market because they have not invested time money and effort into making it a home. All they want to do is leave the responsibility of owning a home that they have just inherited.
This way you get to buy a property at a huge discount without needing to do that many renovations to it in order to set it up to the standards of the neighborhood that you have compared its price to.
5. Tired Landlord
Almost every landlord is prone to becoming a tired landlord at some point in their ownership life cycle. Due to its many complexities and costs, being a landlord is one of the hardest jobs to maintain. It is because it is not a one-and-done opportunity, it is a job that requires multiple hours of your life to solve your tenants issues.
There are some landlords that have horrible tenants and, due to the nature of law in the United States, cannot easily evict them. Which makes their lives absolute hell. Landlords who don’t do the proper tenant screening are landlords that will eventually come up into a lot of issues with one or more of their properties.
Due to all of these recurring issues that they have to face without being able to necessarily get rid of their tenants, landlords tend to look to sell before too much of their money is being eaten away. This brings an amazing opportunity for wholesalers and Real Estate Investors to find discounted properties.
If you can find a landlord that has a lot of problems with their tenants and a landlord that has tenants that are very irresponsible and delinquents, you can easily offer them an all-cash deal and these tend to usually hit very often compared to the other options in this list. Distressed landlords are one of your most valuable leads you can find in real estate businesses.
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