At one point or another, in the house flipping business, you might find that your real estate deal flows are drying up.
You might begin to wonder how other real estate dealers have a constant real estate deal flow while yours has dried up or is beginning to dry up. The answer? They are obviously doing something that you are not. Most house flippers fall into a comfort zone when they begin raking in profits and business seems to be looking up.
I have been guilty of this and I realized soon enough that what I used to do a year ago, just isnâ€™t working any more. I changed my approach and things began to look up for me. I have a list of 7 types of motivated sellers that can help you acquire property on a constant basis.
How To Ensure Your Real Estate Deal Flow Does Not Dry Up
1. The Old Property Owner
This type of property owner is not desirable to deal with which is probably why they do not appeal to many home buyers. Itâ€™s therefore your job to make them feel as if you are the only one who can purchase their home. If the property does not have significant structural damage then it might be good for a house flip but if it has extensive structural damage, make sure you get it at a serious discount.
Before buying this type of property, however, ensure that you hire a general contractor to inspect the home and also include a home inspection contingency clause in your offer. This way, you wonâ€™t be obligated to purchase it when you find that it the math doesnâ€™t apply or the damages are beyond the point of repair.
2. The Deferred Maintenance Property
Some homeowners neglect to maintain their homes when they are strapped for cash. The money they would have invested in home maintenance will probably be channeled towards their mortgage or any other financial obligations that they might have.
This renders the house very unappealing to home buyers. No one wants to purchase a dilapidated piece of property but as a house flipper, you can. Itâ€™s your job to buy property, rehab it and then flip it for a profit. Since you will probably be one of the few people interested in the property, you are in a better position to negotiate a good deal.
3. The Expectant Baby Family
Many couples expecting a baby will want to move out from their small house and move into a bigger one. Chances are they are more preoccupied with reading baby books, keeping doctorâ€™s appointments, among other baby related stuff. They basically have very little time on their hands and selling their home isnâ€™t as important. If you find a scenario like this one, make sure you take full advantage of it and you might just be able to purchase the property under market value.
4. The Job Transfer
Sometimes a person might get a job transfer or a job in another town what with the economy now slowly recovering. In such a case, the person will want to get rid of the house they live in as fast as possible because they do not have a lot of time haggle over the price. This type of person may be hard to come by but if you do, make sure you take full advantage of the situation.
5. The Bank REO
Banks are not in the business of becoming home owners so they usually want to get rid of foreclosed homes as fast as possible. Empty and uncared for homes are typically vulnerable to vandalism. This makes banks motivated sellers and might be willing to negotiate. All these types of properties are no longer easy to come across, they do exist.
In most cases when a heir is left an asset such as a house, they usually donâ€™t want it and are eager to sell it. This is because as the new owner, they are responsible for upkeep, insurance and taxes for the property and this is a burden they do not want to bear. If the property ends up in private court, the court assigns a person to negotiate the sale of the house. If youâ€™re lucky, they might even agree to a price that is way below market value.
7. The Frustrated Landlord
This is the landlord who maybe is tired of his bad tenants, his property isnâ€™t raking in as much profit as before, he realized that he bought property in the wrong market or he just isnâ€™t interested in the real estate business anymore. Whichever the case, this is a motivated seller who is willing to get rid of his property.