Ever been in a bidding war? Ever lost 10 bidding wars straight? I have and needed a solution. Fact is, many markets have so much competition that bidding wars drive up purchase price way above acceptable LTV levels. First, you must always pass on deals that do not meet your criteria, loosening your criteria is not the solution. The solution is to find motivated sellers without all the competition.
3 must to find motivated sellers without competition
- Find lists of motivated sellers – foreclosure, out of state owners, expired listings, divorce, probate, rentals, lease options, for sale by owner, rehabs, etc
- Create a direct mail campaign – automate a direct mail campaign to your lists
- Direct response marketing – use direct response marketing to get motivated sellers to contact you
- Be committed –It is a numbers gam, the more marketing the more leads. Be committed and consistent with your direct mail.
To find the motivated sellers list talk to title, escrow, county recorders office, your local REI club, fellow investors, web searches, etc. It is useful to delegate list creation to assistants even virtual such as rental lists, for sale by owner, rehabs, etc from craigslist, newspapers, etc.
A final tip - It is possible your market is very saturated and there may be other markets that offer plenty of deals that meet your criteria. Do some thorough research. Many markets have tremendous rent to purchase ratios and great LTVs that result in multiple exit strategies and ability to realize good returns while you mitigate risk.