Wholesaling Houses - Other Ways to Find Motivated Sellers

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1) Wholesaling Houses – Other Ways to Find Motivated Sellers

Aside from list of tax delinquent property owners, what are some other ways for you to find motivated sellers?

This video will give you an overview of several other methods.

Jack: All right. Hello, everyone. My name is Jack Bosch, and welcome to the Wholesaling Houses course. Today’s subject is ways to find motivated sellers, and it’s really the part two, because there is another session on MyOpenPath that talks about the wholesaling houses, how to find motivated sellers. The way that I, Jack Bosch, like to do it which is through the tax delinquent property owners, so this entire session is dedicated to that. Now, this session today, that’s why it’s called part two, is dedicated to finding motivated sellers in all the other ways.


Again, my name is Jack Bosch. Here is the picture of me, I’m the co-founder of MyOpenPath as well as a contributor to MyOpenPath. Today we are actually having a guest lecturer, a guest expert on the line, and this guest expert is Mike McKenzie. Mike McKenzie is a full time real estate investor and also a contributor to MyOpenPath. Let me first make sure, Mike, you are on the line. Mike, are you there?


Mike: Hey, I’m here.


Jack: All right, you’re here, wonderful. Good. So the way it’s gonna work is I’m gonna do a quick introduction right now, and then as soon as we jump into module number 1, we are going to…Mike and I are going to do this together. Very simply, my expertise is tax delinquent real estate. My expertise is tax delinquent land and houses. My expertise is how to find people who haven’t paid their property taxes, or the properties where the owners haven’t paid the property taxes. Be it land, commercial, residential, mobile homes, that’s my expertise. But since we’re talking about, going back, about finding ways to find motivated sellers, and today we are not going to talk specifically about the tax delinquent ways, I brought in Mike, who is doing deals on that premises, with all kinds of different methods, all day long. He’s gonna share with us how to do that. With that, let’s get going.


What you will learn today, very simply, is you will learn…my goal for this training is to show you how to identify multiple avenues for locating motivated sellers. So not just tax delinquent stuff, which is very popular and actually, very a hidden secret and very successful, but there is multiple other ways we are gonna talk about. And also, what we want to show you how some online sources for finding motivated sellers. And number 3, we want to show you, how more, some hands-on ways for finding motivated sellers. So we are gonna talk about different ways, about online ways, about hands-on ways. Really, in totality between the last session and this session, you’re gonna have a complete picture about how to find the best motivated sellers.


Again, we’ve broken this down into seven different modules. Module number 1, we’re gonna talk about, and Mike is gonna take the lead on that, we’re gonna talk about finding motivated sellers through the court. Number 2 we’re going to talk about using bandit signs, not just by selling properties but when buying properties and also using cards. Number 3, how to use for sale by owners, FSBOs. Number 4, getting deals through networking, which is very, very powerful and very, very cool. When you can literally in person networking, online networking, there are lots of tools out there that allow you to find a lot of deals. Also, nuber 5, driving for dollars, when you literally get on the road or have other people go on the road to find these motivated sellers or boarded up properties for you. Number 6, mailing lists. Which mailing lists works best, which works not so good, which one we like to use or Mike likes to use and what you’ve got to look for in order to get them exactly the resources and how you’re gonna get those.


And number 7 we’re gonna talk about websites for finding motivated sellers. Yes, they actually hang out on websites, too. As like the world, the entire world is on the web is on the internet nowadays. You need to actually advance what you’re doing if you are already doing deals, and get online, and find deals that way. All right, so with that, Mike, I’m gonna hand over and we’re gonna get started with module number 1.


Mike: Okay, great. Thanks again, Jack, for having me on with you. I look forward to this and like you said I am a full time investor, and I love doing this. Finding motivated sellers through the court is, again, our first module. The court can provide several different ways to find them. There’s bankruptcy lists, there’s probate lists, there’s these particular lists even the foreclosures and other options – there are so many there. Each one is unique in and of itself; most of these lists can be found really outside the local courts office, usually. Sometimes you can go in, they’ll give it to you. Some of the really technically advanced counties may actually have these lists online. Just explore which ways, and which avenues the county may be working, how you can access those files.


Jack: All right, Mike? Let me quickly jump in. I actually wanted to make sure also that we give you a chance to quickly introduce yourself. How many years have you been doing real estate investing already?


Mike: My first real estate deal I actually did back in 2002-2003, as part time and get properties. I had my son in 2001 and knew that college would be coming up at some point so we invested in real estate. The last five years I’ve been investing full time in real estate. My old company was a business partner with which we did deals. We did deals through lists, through networking; any way you could think of driving sellers to us we’ve probably done. I’ve had a great deal of experience with different ways of just asking you to find both sellers and buyers. For instance, this year it has been taking off really well. I’m really excited to share the information I have with you.


Jack: All right, that is exciting. Now, how many deals total do you have under your belt?


Mike: I probably have totally under my belt several hundred over the years. There’s so many. I try to track them, and we’re getting better at our tracking, but yeah we do several…over my lifetime, I venture to get 500+ different real estate deals.


Jack: All right. You guys, everyone understands we are bringing in absolute the best experts that have done 500 deals already in their lifetime. And 500 houses is a lot of houses, right? That’s a little village that he already flipped, so I just wanted to make sure I mention that so you know that we are bringing in the top caliber here to help you understand how this works. And as I said I will pitch in here and there, but I wanted to make sure that Mike had a chance to introduce himself. At the end of the day, at the end of the call we will also…Mike if you want to share how people can get ahold of you, too, if you have a question or not. We like to do that with our contributors, so we put you there his information on the screen towards the end of the class. All right, Mike, now please continue with the different ways of getting those deals.


Mike: Okay. As we said there are many different lists that are available at our courthouse. We take a look first at bankruptcy lists. It’s our first one on our next slide. Bankruptcy lists are the properties that need to be sold to settle debt. Many times there’s additional properties and bankruptcies that may not necessarily be your person’s primary home, but then they have other properties to summon to the bankruptcy sales. Those are great avenues to find deals, again, but these folks are trying to settle debt for pennies on the dollar. They’re selling properties pennies on the dollar.


Jack: Right. Also, if I may add in here, in the bankruptcy court, you’re dealing in this case, you can go about it multiple ways, right? You can go about it through going to the court records but you can also go about it through by connecting and networking with attorneys, right?


Mike: Absolutely, absolutely. You get a couple of good attorneys that are in bankruptcy, working bankruptcy things, they can be a valuable, valuable asset because they’re wanting to clear the case load or case files that they’ve got on that particular thing. If they’ve got someone they can pick up the phone and say, “Hey, look. I’m working this case. I know you buy properties. Would you be interested in this?” That just further helps them to move along the process of that particular bankruptcy that they’re working on.


Jack: Right, because a bankruptcy that’s stuck somewhere doesn’t necessarily pay the attorney more fees. They either get a certain flat fee or they get by the hour, but if nothing’s moving, they can’t move it to the next stage when they can send the next bill and charge for the next piece, bunch of paperwork in there. So they have an interest in helping flush those things out. Working with an attorney definitely is something that works, or mining the court records and going to the court website and looking for the kind of bankruptcy proceedings there obviously also works, and then sending them a direct mail, correct?


Mike: Right.


Jack: All right, awesome. Sorry. I just jumped in here to go a little bit deeper…


Mike: No. I love that. Again, I love doing a panel with someone like this when there’s things that I forget or things that I don’t know that Jack may know, that maybe a thing that’s worked for me that I can pitch in that Jack’s talking about as well. Our next thing’s gonna be probate lists. I really, really like probate lists. We’ve done a lot of this and we do them in the different avenues. We’ll talk about where they’re all out, and where you can get these lists. But you can make these properties transferred to a living person so the government can continue to receive taxes. They need to be transferred. When you have a death, there’s a home involved. Until that house is sold and can get back on the market, the government is not receiving money on that through the taxes.


A lot of times these deals can be…we just got one not long ago that…honestly and it was even on the MLS listing. Literally we bought it for half of the MLS price that the realtor had it. So there are some great deals out there. Probates, again, like I said is probably one of my favorite lists.


Our next one there’s other miscellaneous auctions, sales, and things. Properties on these lists need to be sold quickly, and you can buy at extreme discounts. Government is very motivated to sell properties with a discount. Again, if the government is holding onto the property, it’s not making any money for them. It’s like us as investors; if we’re holding onto a property and it’s not rented out, leased out, not being sold, that property’s not making us money just sitting in our inventory; same thing with these guys. Auction sales is another really good one. Drug seizures, drug house seizures and things, you can get some really good deals that way. Again, the sheriff’s offices that are handling these things, they’re not real estate experts. They simply need these things off their books. And a lot of times they may even get a percentage of that sale that goes into their agency as well. They are very much ready to move these properties.


Jack: Let me quickly jump in on the drug houses. I can already see the hair on the neck of a lot of the people listening to this stand up and say, “What? I’m gonna buy a meth house? Isn’t there an almost kind of like an environmental protection stuff. Isn’t that house unlivable?” and so on and so forth. And certainly that is true, but what most people don’t know — just a little side note — is that for example I have a friend that specializes in these exact meth houses because he knows it only costs an extra between $2500 and $7500 to remedy the entire meth problem. When the meth fumes and so on have gone into the walls and so on, it becomes an environmental, health and safety issue. Well, it only takes a few more thousand dollars to remedy that kind of stuff, but because everyone is so scared of it, you get literally tens of thousands of dollars in discount on such a property.


It goes back to the point again that what we are buying, we’re…another friend of mine always says, “We’re not buying real estate. We’re buying urgency and we’re buying opportunity, right?” We’re not buying a real estate; we’re buying urgency. In this case, the Sheriff has an urgency. He doesn’t wanna have that thing sit on his box. He doesn’t wanna have a bunch of stuff that he doesn’t get property taxes paid on, so he sells it. If on top of it, it’s a meth house, well, even worse. Nobody’s gonna bid on it which gives you the opportunity that if you have knowledge, and knowledge is power, applied knowledge is power, then you can apply that knowledge and get a property like that for even less than you could ever dream. As a result, you can wholesale it to somebody who specializes in the meth house kind of pieces and so on.


Just wanted to lay that out there so that people are not scared of these houses. Certainly you’ve got to do your due diligence and you’ve got to be careful with them, but most kind of rehab, or the rehab, or the repairs of most stuff costs less money than the average person thinks it does.


Mike: Yeah. To extend on that briefly, Jack, as you know, my previous life before I got into real estate full time, I was in law enforcement for about 15 years. Part of that was dealing in drug sites. The great thing about meth type houses is the state actually come in and sold that major house. They come in, there’s strict EPA guidelines for them removing the dangerous spots around the house for them to render that house safe. They can’t release that house until it’s relatively safe or it’s a huge liability. All of the bad things that were or is in the house is taken out. They’re disposed of properly.


Again, that is no cost to you; the agencies handle that. All you have to come in and do is just spend a couple more thousand dollars in cleaning up. Sometimes there won’t be drywall; different things like that. Again, most of the work has been done for you, so they can be great deals. On the flip side of that, you may have a lot of houses that are seized that are nice houses. I’m talking hundreds of thousands of dollars of value in the house because it may have been a particular drug person that actually trafficked large amounts of drugs but never touched them himself, but it’s linked to his house so they’ve taken his house. Again, that’s another great opportunity, too.


Jack: All right, wonderful. We like auctions. We like those kind of things, government sales, goes right back to what I said a moment ago. That’s the area I’m coming from, from the tax delinquent area, and those kinds of things including some shared sales. Great, so go ahead now.


Mike: Okay, let’s move on to foreclosure auctions, on my next slide. All right, these properties, again, these lists need to be sold quickly, and it’s mainly by extreme discounts. Foreclosures are owned by the bank. Banks have foreclosed on these properties. These properties cost them money just being there. These banks are incurring fees, insurance fees and things like that just sitting there, and it’s incentive for the banks to even foreclose, so they need to recoup as much of that debt as they can, as quickly as they can, which makes these foreclosure auctions a great, great place to get that information from.


How to get a list. There’s multiple ways to get a list. You can…again, what we talked about, they can be down at the courthouse itself. You can be outside the clerk of courts office. Again, some of these courthouses here recently are starting to put things online. I think you’ll see a lot more of that as we progress with technology. If these lists, if you go in and you can’t find them, ask them. They’ll tell you but typically they have to be posted in some public area that you would have access to, to see those lists because they’re advertising auction dates and things like that. They want folks to see when and where that auction’s gonna be held whether at the court house, at the property itself, or wherever it may be. The more folks that they can get to show up, they’re hoping it will drive up the price a little further. Those lists are very much readily available to you.


The courthouse realtors love these types of lists. They have ways to search different lists, give you probate lists, or properties. They can do that. There’s also multiple, multiple sites online; USProbateLeads.com is one, ProbateGoldmine.wordpress.com is one. I encourage you to look at these. I also caution you on any of these online things, do your due diligence on them. Make sure there’s not particular surcharges or fees that would be charged to you if you bid on these. Again, as you see the screenshots there, they’re nationwide, so it doesn’t matter where you may be in the country. There’s deals to be had. You just have to go in and look at them, and see what they want you to be approved or to be qualified as a buyer. Some of them don’t have a lot of stringent things. Tey’re definitely good choices and good avenues for finding that property.


Jack: Right. Bid4Assets, treasury.gov is a few more. Also, in other areas you can go to, for example, for foreclosure stuff, auction.com is one of the biggest websites out there. As a matter of fact it used to be a competition with us when they did land auctions. It used to be landauction.com, then they switched into the foreclosure world, and so they’re auction.com. You can find lists there. You can find even for wholesale houses there, sometimes you get…there’s a bunch of competition there but sometimes you can get good deals from there. Hudhomestore, obviously the HUD is great, there’s some rules around that. Hubzu, I mean it goes on and on and on.


To wrap this all up together, I wanted to make sure that everyone understands there’s an abundance of ways to get lists from just those four different ways that we mentioned here — foreclosures, bankruptcies lists, probate lists, other miscellaneous auctions, foreclosures. I mean literally there’s an abundance of places just in that method. And most of these are available online as we just showed. Most of them are available online so you can get leads up the wazoo from them. Now, you’ve got to understand, though, that different leads are easier or harder to get by.


If I go back a slide, these lists right here, you can get them fairly simple. Some of these things like bid4assets.com, there is a list of what’s coming up for an auction and so on treasury.com, usprobateleads, these might be subscription based services that you are not the only person using. As we’ll talk about in and out here, off and on a little bit today, is it’s not the subject of today’s session, but we wanna make sure that you understand that some of these leads come with a substantial amount of competition, which is why I always like to talk about the tax delinquent ones which we talked about in the previous session. In this more competitive environment, what you wanna end up doing is, you wanna end up being the guy that’s most persistent. The one that follows up the most is the one that ultimately gets the deal. And perhaps you can just say a word or two on that from your own experience, Mike.


Mike: Absolutely. They talk about…not quite sure how the saying goes, but one that squeaks the loudest tends to get more attention than anything else. I want to touch on properties, that HUD Home Store site that you showed on the one webpage. I bought probably over a hundred properties on hudhomestore.com. I bought properties there. They’re in all different price ranges. They’re not low end houses. There’s low end, there’s middle end, there’s high end. On a personal note, I got remarried two years ago. In the process before I got remarried, we were gonna need a larger home. We were out looking at houses. I’m in real estate, so I’m looking all the time for a deal; not gonna pay retail for anything.


The house that I’m in now, long story short, is a HUD home. We got in this house with minimal work. Well, we did a little work. My wife’s budget was a little different than what mine was, but what I’m telling you about that is we have almost $100,000 equity in our home and that’s from buying off of HUD Homes Store. We were able to get it. Actually, I wanted to make sure I got the house I bid over what they were even asking for the house. We put in some work. We got $30,000 worth of work that we wanted to customize it to our taste, and I’ve got instant equity in a home.


Jack: All right. Well, that’s exciting. I got a somewhat similar story, but it wasn’t a foreclosure home. It was a home that was a foreclosure home, then it went to a doctor, and we bought it to the doctor, but we did the same thing. I found the home that I really, really wanted. We just sent direct mail to them. Again, direct mailing the entire neighborhood to all the houses that we really liked, worked, even though in that case, we didn’t know if they’re interested or not. But we got…probably, we sent about a hundred letters and we probably got like eight people calling us wanting to sell us their house. One of them is the house that I live in today. It didn’t come through HUD, but it goes to say that with some of these methods, you can find the house of your dreams basically in there, too.

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