Facebook ads, landing pages with funnels, and Craigslist posts may be some of the first methods that you reach for when you think about finding motivated sellers in real estate, but real estate is very much a relationship business, and relationships are still some of the most effective ways to fill your deal pipeline of distressed houses to flip and wholesale.
Relationships give you access to the thousands of people on the outskirts of real estate transactions that you can tap into as great sources of real estate referrals.
The list below details the many types of people and businesses that you can build relationships with, to in turn help you get in front of more motivated sellers with distressed properties.
- Title Companies
- Property Managers
- Hard Money Lenders
- Credit Repair Agencies and Credit Counselors
- Accountants and CPA Firms
- Charitable Groups and Churches
- Retirement Homes and Nursing Homes
- Funeral Homes
- Military Bases
- Insurance Brokers
- Local Builders
- Bail Bond Companies
- Repo and Towing Companies
- Abatement and Preservation Companies
- Fire, Flood, Disaster Remediation Companies
- Hair Salons, Barbers
- Landscaping Companies
- Carpet Cleaners
- Cable & Phone Installers
The MLS is not dead, at least not everywhere, and you can still find good deals on-market, especially in markets where values are going up rapidly.
Although you can find many types of “Needs TLC” on-market properties without the need for a realtor, some advanced searches such as for Expired or Withdrawn listings are still mostly reserved for licensed professionals with MLS access.
Thus, having a good network of realtors with an ear to the ground is still one of the top ways of finding deals.
Some of these include:
Expired and Withdrawn Listings
Expired listings are those for which an agent did not find a buyer and the contract between the seller and the original agent came to an end. These listings are now technically off market, however you already know that the seller was in some way motivated to sell the house. The most likely reason listings expire is that they were overpriced, and so after it expires the homeowner may be more receptive to a lower price.
Withdrawn listings, on the other hand, are those that may still be under the terms of a listing agreement with the original real estate agent, and so still technically on-market even though the listing is not on the MLS anymore.
The seller of such a listing may have needed to withdraw it from the market for any number of reasons, such as repairs needed on the home, and may also be motivated to sell the home at a discount so that they don’t have to deal with the reasons for withdrawing the listing.
Title companies are in the thick of property transactions, and know when a closing fails. Property sellers who have buyers back out of deals may need assistance in closing quickly and are highly motivated sellers. In either case, your title rep can let you know so that you can step in to save the day.
There are a number of helpful categories of attorneys that you can reach out to and build a relationship with: divorce, estate, probate, or real estate attorneys. As a rule they’re unlikely to recommend someone that they have not worked with before, as they would be putting their reputation on the line, so it’s important to build a strong relationship of value first. Then, and only then, ask for the business.
Clients of divorce attorneys who are getting divorced often want to dissolve the family home as soon as possible.
Estate and Probate Attorneys
Real Estate Attorneys
These attorneys have relationships with real estate developers and home builders, and investors who may be in need of a buyer like yourself. Developers and builders may have lots to build on or liquidate and investors may be selling a half-finished flip, for example.
Property managers have inside knowledge as to which properties are well maintained, and which properties have renters that are paying on time, and those that aren’t.
If the vacancy rate or eviction rate is high, the landlord may be ready to throw in the towel, and the property manager might just be the one who lets you know about it.
Hard Money Lenders
Hard money lenders know when a rehabber is in over their head and needs someone to step in so that they are sure to get their money back. You can be that reliable backup to step in and take over a troubled property.
Credit Repair Agencies and Credit Counselors
A person who is facing a situation where they need credit repair or counseling likely took a huge hit to their credit, by missing mortgage payments or defaulting on a loan.
Accountants and CPA Firms
Always in the know when it comes to their client’s financials, accountants might be able to pinpoint who needs to liquidate, fast, and might be able to suggest your ability to purchase and close quickly to their customers.
Charitable Groups and Churches
Charitable groups and churches often receive gifts of property. In many cases they would prefer quick cash instead, so see if they have any inventory they would like to liquidate.
Retirement Homes and Nursing Homes
When a family member is moved into retirement or nursing care, the family may wonder what to do with the former home and contents, especially if the person is incapacitated and unable to make decisions. You can provide your information offering a quick sale.
One way to help the owners, who may be overwhelmed by the amount of possessions they have to remove and sift through, is to offer to clean up, pack up, and haul items away from the home for them if they decide to sell to you.
New home builders that overpromised may need help, or can direct you to owners who ran out of money before a build was complete.
The service-based businesses below see it all, day in and day out. They are there when a home is being cleaned or repaired, when a service is shut off, they drive by the stuffed, saggy mailboxes of vacant houses, and they may even know when homeowners are behind on payments.
There are a number of ways to entice these business men and women to keep an eye out for these properties with potential. You could offer a price for every lead, or you could offer a cash bonus for any property you close on. Either way, create wallet sized cards with “$$$$ for Houses, Any Condition” or some other clear message that fits your business model, and deliver them to the businesses below.
Bail Bond Companies
Who better knows if a flipper started a rehab and ran out of money? Rehab construction companies and contractors do.
If you see a team working on a flip property while driving your neighborhoods, stop and offer them a card. They are not only great contacts in general, but they can tell you if the owner of the property started a rehab or ran out of money. If the second, it benefits them to get someone in to finish a project, and the flipper needs a hand, so be on the lookout.
Repo and Towing Companies
Abatement and Preservation Companies
Fire, Flood, Disaster Remediation Companies
Hair Salons, Barbers
Cable & Phone Installers
The cable guy will know when someone’s cable gets disconnected.
Delivery companies cover a lot of territory — more than you could ever cover on your own. While they may not know of a particular homeowner’s situation, you can offer to pay them for any closed leads that they send you, for any addresses on their routes that look run-down, dilapidated, with overgrown lawns and trees, or any of your perfect candidates for a driving for dollars YellowLetter campaign.
FedEx, UPS, USPS Mail Carriers
Delivery Providers That Enter a Property
The delivery companies that get to enter a property also get a glimpse into how people live. Perhaps they can tell you about a hoarder situation. These can include:
Pizza & Food Delivery
Other Real Estate Investors
Real Estate Wholesalers
A real estate wholesaler is someone who purchases or places a discounted property under contract and gets paid to assign that contract, or double-close on that property to a buyer, usually a house flipper, for a finder’s fee.
Why would you want to pay someone else for a deal? In short, to save time, and money. A real estate wholesaler will perform all of the lead generation that you would normally have to do, to find the deal. A good wholesaler will have dialed in their techniques to be able to come up with more deals than you could come up with on your own, or can even participate in.
A good wholesaler will also make sure that the deal is a win-win-win for the seller and the investor, and himself, where the seller gets a ticket out of their situation, the investor gets enough spread to make a profit, and the wholesaler gets the finder’s fee for their efforts.
To find wholesalers, you can go to real estate meetups, or call the phone numbers on those “We Buy Houses” signs. A wholesaler who hustles will ask you for your buying criteria and then actively try to find deals that meet it. Soon, a steady stream of deals will be coming to you.
Whereas a wholesaler should bring you a deal that is ready to close, a bird dog might use all of the techniques mentioned in this article to get you a lead, usually just the property address and condition, leaving it up to you to follow up and close the deal.
Consequently, the finder’s fee will be commensurate with how early in the property acquisition process the lead is.
Other Investors Like You
Regardless of whether you are a real estate wholesaler or a flipper, it might be counterintuitive to you to meet with other people who you might almost consider competition. Well, you should forget about all that and instead adopt an abundance mindset.
We all have our specific skillsets and resources, and more often than not you can do much better by partnering with someone.
For example, you might meet other investors who may already have access to deals, but have run out of sources for money. Or, you might meet partners who have money, who are looking to partner up with you because of your background in construction management.
Meet as many people as possible at real estate seminars, groups, and masterminds, who are successful in your favorite real estate investment strategy, and I guarantee you, that you will find an abundance of opportunity.
Although the Internet has made it easier than ever to find real estate deals for your house flipping or real estate investment business, real estate is still very much a relationship business, and you would be well rewarded by building relationships with the types of people who frequently come across the kind of opportunities that end up being great deals.
Building relationships is not just about advertising and not about shoving your cards down people’s throats. Building relationships starts with providing value, and being of service to others with no strings attached, so that when that opportunity does come around, that you become the only logical referral.