I LOVE vacant house deals, and that is simply because they are disguised gold mines. You guys remember in my real estate investing training article, 5-step process for quickly turning abandoned property into BIG paychecks, I covered the fundamentals of vacant houses. But today is a continuation with more detailed info on the process for investing in abandoned real estate property.
In my last training article, we covered several ways that you can spot those gold mines disguised as vacant houses FAST. Today’s training installment is the second step in my 5-step process for quickly turning an abandoned property into BIG paychecks – Finding Motivated Sellers. I like to think of these types of deals as gold mines that are simply disguised as vacant homes or abandoned property.
This is mainly because there’s not a lot of competition for them. Not only is it challenging to find vacant properties, but it can be even more challenging to find the owners or motivated sellers of these vacant houses. Oftentimes, because it is indeed more challenging, fewer investors will actually spend the time and effort searching for them (which is why this is a GREAT opportunity for you).
Here’s a brief reminder of the 5 Steps for Quickly Turning Abandoned Property into Paychecks:
#1. Spot or Locate the Vacant Houses
#2. Find the Seller
#3. Strike a Deal with the Seller
#4. Flip the House to Another Investor
So, now that we know how to spot vacant properties FAST, the next logical step is to learn how to quickly find the owners or motivated sellers of these vacant houses.
So let’s get to it…
The Hunt Is On For Motivated Sellers
Waste Of Time Methods To Find Motivated Sellers
Instantly, your initial reaction to trying to find these motivated sellers might be to talk to the neighbors in that specific area, by the good old-fashioned way of knocking on their door. But… then you quickly learn that maybe this isn’t the best idea. And you’re right! Actually, it’s a HUGE waste of your time (your bird dog will agree). And you know that your time is much more valuable (and much better spent) negotiating with motivated sellers and finalizing deals.
So think about it this way… if you were to get sucked into a long and drawn-out conversation with ‘Mr. Neighbor’, who is lonely and doesn’t have people to talk to on a regular basis (until you show up). Well…let’s just say that you’re about to become ‘Mr. Neighbor’s’ best friend and learn every little detail about him over the next 2-3 hours (sad but true). Believe it or not, I’ve tried this tactic. And yes, although it might help you get the information that you’re looking for on the motivated seller, there’s a great chance that you just simply end up wasting your time.
And more often than not, this is how you fall into the typical 'not worth your time' category of neighborhood watch groups. (Yes, they do exist).
Furthermore, if you do talk with people in a neighborhood watch group, you’ll most likely find out that (a) they don’t know that a house in their neighborhood is even vacant, or (b) they don’t seem to care too much. Either way, you end up getting no useful information out of them.
So let me further explain some valuable options for locating these motivated sellers…
Methods That Work To Find Motivated Sellers
Today, I have several tactics to share with you (and I will admit that some are better than others). But… I’m sharing all of them with you so that you’re fully armed with the information, and can then decide what strategy works best for you.
To start your search off right, you can begin with the Tax Rolls– which is a list of taxable property either by township, city or county. Tax Rolls contain the name and address of the person (or entity) that is paying the taxes on the property. In other words, you’ll learn where the tax bill is mailed.
You’ll also be able to see the square footage of the house, the number of bedrooms and bathrooms, the assessed value, the most recent purchase price (in most states), etc. This is all of the data that the tax assessor maintains in order to assess and collect property taxes.
Here are a couple ways to access them…
First, you could march over to the Tax Assessor’s office and look up the details using the property’s address (which you probably got from your bird dog) or you’ll likely be able to find it easily on the Tax Assessor’s website for your area.
But… here’s where it may become a little challenging. If the owner or motivated seller's address is listed as that of the vacant house–this could be a dead end, simply because we know that no one lives there. I refer to this “dead end” situation as “matching address”.
This isn’t the end of the world, so don’t let it get you discouraged. In fact, you should actually get excited! I know what you’re probably thinking, “Why should I get excited Cam?” Well…because, once again, this reduces your competition!
Remember – the harder it is to find the seller, the better the deal.
So now we’re going to dig a little deeper, and if that means putting on your Sherlock Holmes’ hat or any other clichés that you can think of, then let’s get to it
You may be thinking… “But Cam, this means more work and time on our part.” Yes, it does mean a little more work for us, but it will be worth it. So on that note, let’s dig deeper and get ahead of our competition (this is where everyone else usually gives up–but not you).
Tax Rolls really are a great source of information.
|*Pro Tip: Not every tax assessment is accurate. (Keep this in mind as you’re pulling that information and data.)
Online Name Search
If you have the owner or motivated seller’s name of the vacant house, then you can search for more information about them online (by Googling their name and city).
But…by doing this, it’s important for you to keep in mind that you could either come up empty-handed or in some cases, (if they have a common name) the search could bring up too many results to comb through, thus leaving you uncertain of where to even start. No one likes dealing with uncertainty, which is why I consider this tactic a waste of time.
FSBO (not for the faint of heart)
Then there’s this one (that takes a lot of boldness, folks). You place a FSBO sign with your phone number in the yard of the vacant home.
By doing this, the motivated seller will most likely hear about this and call. If and when they do call, you have to be prepared with a good and viable reason for why you put that sign there. Of course, it was accidental. This will be a great time to ask if you were to pay all cash and close on the date of their choice, what would be the least they could accept.
Send a Letter
You also have the option to send a letter to the owner. (Remember from my previous post, we talked about how adding the Return Service Requested is super helpful.) Okay, so let’s say that the Tax Roll address of the owner or motivated seller matches the address of the vacant house. Well, by mailing a letter to that address with “Address Service Requested” on it, you would be sent that forwarding address from the USPS and your letter would then be forwarded to the owner.
This is a good strategy.
But – if you’re like me and you prefer the 'straightforward method' – just go directly to skip tracing.
Why Skip Tracing Is The Best For Finding Owners
Plain and simple, skip tracing is the heavy hitter’s method of locating missing, motivated sellers. All that you need for a skip trace is the owner’s first and last name (and remember, you can get this info from the Tax Rolls) and the vacant home address. Yes, that’s all you need.
In reality, skip tracing is actually an elaborate way of saying, “the process of locating someone”. Historically, the word originated from an old term, which related to landlords that were tracking down a 'skipped tenant' who ran off and missed a rent payment or didn’t pay for damages.
By using a Skip Tracing Service (fee based), it’s easier than ever to run circles around your competition by finding houses that they can’t touch. Skip tracing is a game changer. Over the years, I’ve heard from countless students and clients who’ve said how valuable this strategy is. Here is an example from an email that was sent in: “The last skip trace got me $7,500 in about a week’s time on a wholesale deal. Other investors were mad because they had been trying to find the seller and couldn’t.”
|Paid Skip Tracing – is searching for records that are not available to the average Joe (you), that oftentimes produce the results you’re looking for (In our case– the phone number and other vital details about the owner or motivated seller of the vacant house.)
Because the fees for skip tracing vary, I suggest that you check out a few different companies to compare fees and results.
Skip Tracing Secrets: Hide & Seek Revealed
Let me explain why it’s usually super difficult to locate motivated sellers…
As investors, oftentimes, the motivated sellers that we’re searching for aren’t leaving any kind of trail (or bread crumbs) behind to help us locate them. Or perhaps they’ve recently moved out and the new trail hasn’t been made public just yet.
Investor or not, we are all human, and as we progress through our daily lives, we leave a trail of where we are and what we’re doing. And that trail folks is relatively available to professional skip tracing services.
Here are some common ways people create trails:
- Buying gas
- Applying for a new credit card
- Initiating a new insurance policy
- Paying for a doctor’s appointment
- Registering a vehicle
- Turning on utilities
- Getting internet service
There are often times when people don’t do any of that and stop leaving a trail. (This is a pretty common scenario.)
What do I mean?
Well, let’s say that there’s a seller who’s behind on their mortgage and they know that the bank is coming after them because the Notice of Default has been recorded. Indeed, it’s no surprise that they’re going to lose their house. But rather than staying and fighting, their pride and dignity tells them to move on because there’s no fixing this situation. Ultimately, they decide to move in with mom, albeit temporality.
So now you must ask yourself the following questions, “Does that person need to turn on phone service with mom’s address? Would (s)he register a car with mom’s address? Would (s)he apply for a new insurance policy with mom’s address?” In all of these cases, the answer is probably, “no”.
After all, it’s a temporary situation and when that happens, the clues just cease.
Skip tracing might also provide AKA names. These may include: past married names, maiden names or the misspelling of a name on a credit application. Whatever it may be, skip tracing can cut through all ambiguities like that.
Why Skip Tracing Is Worth It For Finding Sellers
Oftentimes, skip tracing will search for other properties (past and present) that may be in the seller’s name. Then, it’ll provide the data on the neighbors of that property, and neighbors from previously owned properties who may have info about the former owner.
A skip trace can help determine if the seller is actually deceased. If this is the case, then the house is most likely in probate and a skip trace could help find the seller’s heirs.
Skip tracing will often provide the seller’s “associates”.This can be anything from a colleague, or business partner, to a co-borrower, to a co-insurer to an ex-girlfriend or ex-boyfriend. In other words–people who are somehow tied to the person that you want to find.
|*Pro Tip: When speaking with the missing homeowners family, associates, neighbors, etc., you need to have a certain approach. If you give off even the tiniest of hints that make you seem like a creditor, that associate will most likely send you packing. They’ll likely guide you away from the seller if you sound like someone who is owed money by the seller.
For instance, this is what you might say:
“I may have money for Mr. Smith for his house at 123 Main St. He doesn’t owe me money – please make no mistake about it. I may have money for him. Do you have any idea where I can find him?”
The reality is–quality skip tracing really 'digs' in for you, primarily searching for those hard-to-find details and clues that will ultimately help locate the motivated vacant house owners. I honestly can’t say enough about how effective and powerful skip tracing can be for finding the motivated sellers of vacant house deals.
Today I’ve shown you several methods for finding the owners or motivated sellers of vacant homes. Once you’ve found the owner or motivated seller of the vacant house, the next step in my 5-step process is to make a deal with that motivated seller and then quickly sell it off to another investor. But don’t worry, I’ll go into depth and explain exactly how to do all of that in my next real estate investing article.