How To Buy Houses From Motivated Sellers In Real Estate Investing

In most real estate investing business models, motivated sellers remain the number one source of the most profitable deals. Successful real estate investing should therefore incorporate finding deals from motivated sellers and successfully closing them.

This article points out important areas you need to focus in your business.

To learn how to attract motivated sellers, see one of my previous articles. Once you have identified motivated sellers, the next step should be to secure and close the deal.

In my business, I get all my leads through my real estate investor website.   Approximately half the deals I receive are submitted directly by motivated sellers. The other half are entered by my virtual assistant who calls back motivated sellers who choose to use the phone, and she pre-screens them for me.

I therefore receive all my deals fully pre-screened, and pre-negotiated.   I can therefore easily identity a good deal in a few minutes.

You must then set up an appointment to see the house as soon as you identify a good deal. The main reason you need to see the house is to estimate repairs. If you have bought a few houses, then you know you need about 10 minutes to come up with a fair ball-park repair estimate.

You do not have to get it detailed down to the nail, you just need a safe rough estimate, preferably higher than normal to be safe.

Make sure you sign the contract while you are with the buyer.

If you later find the numbers do not look as good, you can always cancel the sale later.

If you like the deal, fax the contract to the title company so they can do title work for you. Always make sure you deliver or mail the earnest money to make the contract binding.   Earnest money should go to the title company, not the seller.

depending on your exit strategy, the next steps are determined by your business model:

1)    Wholesale the deal
If you plan to wholesale the deal to other real estate investors, this is the time when you market the deal to them.   A good real estate investing website should also help you build a list of potential buyers automatically - then you just email your deal to them.

Once you identify the wholesale buyer, you then sign a contract with you as the seller if you plan to do a simultaneous closing. Alternatively, you can assign the contract for an assignment fee.

The title company will then do the closing and disburse all the money as agreed.

2)    Lease option / Lease to own
If your exit strategy involves taking over existing payments, then your title company should conduct the closing.

This is why it is important that you select a title company that works with real estate investors and understands various real estate investing business models.

3)    Straight buy
A straight, traditional transaction will be needed if you plan to buy fix and sell, or to buy and hold.

Other business models would follow similar steps; these 3 are just the main ones.

When all is said and done, your success in real estate investing, largely depends on the efficiency with which you pre-screen your leads, follow up with them to tie up the deal, and efficiently close the deal.

About the Author

Find out how you can run your real estate investing business from an interactive real estate investor website that automates most aspects of your business delivering pre-screened and pre-negotiated deals so you spend less money, time and effort while you close more deals.

Author (simon87). Submitted on Tue, 7 Feb 2012 Time: 10:46 AM

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