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.

 In this article, we point out important areas you must focus on in your business.

 The key sources of attracting motivated sellers are covered in a separate article.  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 motivated sellers submit their information directly through the website.   The other half calls and leaves a voice message and my virtual assistant pre-screens them for me and submits the information on my website.

 All the deals I receive are therefore pre-screened and pre-negotiated. With all the numbers well presented, I can tell if it is a deal or not in just 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.

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.

If the numbers look good, always make sure you always carry a purchase / sale agreement (contract) so that you must lock that deal as soon as you see the house.

 If you later happen to crunch the numbers and find you cannot make the deal happen, you can always cancel the sale.

 If the deal works, fax the contract to the title company so they start title work. 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.

The next steps in the process depend on your business model and what your exit strategy is:

1)    Wholesale the deal
 If your exit strategy is to wholesale the deal to other real estate investors, this is when you market the deal to them.  If you have a good real estate investing website, then you have probably built a list of potential buyers and you simply email you 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 will then do the closing and disburse all the money as agreed.

2)    Lease option / Lease to own
 Your title company should conduct the closing if you plan to take over existing payments.

 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.