subject: How To Target Absentee Owners For Massive Profits In Real Estate Investing [print this page] In order for any real estate investing business to remain profitable, it needs to have a constant flow of people looking to sell their houses. Absentee owners happen to be very motivated sellers, and you can find them right in your local market.
In this article, we discuss how to target these absentee owners for massive profits.
Why absentee owners?
Absentee owners mostly own other properties somewhere else. Most of these second homes are rentals, or they probably ended up buying second homes due to job transfer, divorce, etc.
You should pursue these due to a variety of reasons:
i)Burned landlords
Most people make little or no preparation to become landlords. Either they don't pre-screen their tenants properly, or they paid too much, it has been vacant for months, or a variety of factors work against them and they find they are not making any money as they had expected.
And they become very motivated sellers.
Just yesterday, I met a friend who is going through a court eviction process with his tenant in Birmingham Alabama. When I asked him how much cash flow he makes when the tenant used to pay, he replied that he has to pay about $200 out of his pocket every month to make his mortgage payment! The tenant stopped making his payments 5 months ago.
It turns out he has a lot of equity in the house, making it a good buy for a real estate investor.
Most landlords last about 3 to 5 years. This means there are always absentee owners in your area that need to sell.
ii)No attachment
Since absentee owners do not live in these houses, they have very little emotional attachment to them. This makes them very easy to work with.
iii)Lots of inventory
Until recently, about 25% of homes purchased were second homes. This means the market has hundreds of thousands of these houses ready for you to buy.
How to locate and reach burned landlords
Direct mail is my favorite method to reach motivated sellers. Post cards are cheap and easy to manage. If you do it correctly, they can give you very high response rates. We have covered how to send effective direct mail in a separate article.
You have to narrow down your farm area by zip codes when locating burned landlords. Middle class income areas are more preferable. In my market, these houses are between $100,000 and $150,000.
I like to order my lists from melissadata.com. When you place your order, use the following criteria
1)A minimum of 3 bedrooms and 2 bathrooms
2)At least 10 years old
3)Between 1000 to 2500 square feet
4)Single family houses. You can also include duplexes, triplexes, and quads.
Target to buy at least 2000 names. More is better. You will receive your list in an excel spreadsheet.
Send them your marketing piece every 2 months for one year.
Most people make the mistake of not following up - most people respond after several contacts. You can send them a combination of letters and post cards, the choice is yours.
by: Simon Machcria
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