How To Buy Houses From Motivated Sellers In Real Estate Investing
No matter what your real estate business model is, motivated sellers remain the most profitable source of good 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.
I have pointed great sources of getting motivated sellers in a different article. As soon as you identify a good deal, you must then secure and close the deal.
In my business, I get all my leads through my real estate investor website. Approximately half the motivated sellers submit their information directly through the website. 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. This is mainly because you must estimate repairs. You should be able to come up with a ball-park figure in about 10 minutes or less.
A thorough estimate of the repairs is not necessary. You just need a rough estimate.
Make sure you sign the contract while you are with the buyer.
If you later happen to crunch the numbers and find you cannot make the deal happen, you can always cancel the sale.
If you like the deal, fax the contract to the title company so they can do title work for you. Remember to deliver or mail the earnest money so the contract becomes 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
This is when you market the deal to other real estate investors if your exit strategy is to wholesale the deal. With a good real estate investing website that builds a buyers list for you, you would just need to email your new deal to your wholesale buyers list.
If you plan do a simultaneous closing, you then sign a contract with you as the seller. You can also assign the contract for an assignment fee.
The title company conducts the closing and disburses the money according to the contract.
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 you must select a title company that understands real estate transactions and works with real estate investors.
3) Straight buy
If you plan to buy fix and sell, or keep as a rental property, then this is a straight traditional transaction that any title company can close.
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.
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.
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