If you are a real estate investor or considering becoming one, you understand (or soon will know) that real estate investing is focused on finding truly great deals and that starts with motivated sellers.
So, why does it surprise people when I speak on goal setting that I spend lots of time on goal setting regarding motivated sellers. If you need motivated sellers, to accomplish most if not all of your other goals, then doesn't it sound right to focus on the motivated seller part of your goals, at the least at the start?
Anyone considering my portfolio of audio CDs and courses will begin to find a pattern; over 1 / 2 of the titles are about finding motivated sellers. Why is that? Let's think about it.
Let's say you've a goal to make $10,000 monthly from owning rental property. To get rental property that will give you excellent cash flow, you'll need to purchase the houses that have strong rents and try to purchase them as inexpensively as possible. How do you buy houses inexpensively? You need to locate sellers who've reasons to trade you equity they've in their residence for a solution to their problem.
The cheaper you can buy the home, the more cash flow you are able to generate from the home and the quicker and more safely you are able to achieve your goal of generating $10,000 in rental income. Try buying houses for top dollar and generating rental income from them quickly. In every but a couple of markets, it's very hard to complete (if not impossible).
But wait! You say your goal is to generate income from wholesaling property... you do not need certainly to generate cash flow as a rental. Well, motivated sellers are a lot more vital that you you.
Have you ever tried to put a home under contract with a un-motivated (read that as inflexible) seller? It could be tough. In the event that you are trying to put a home under contract so that you can wholesale it to some other investor for a 4 or 5 figure payday, you NEED to perform a few things:
1. Make the offer very appealing to the investor you are wholesaling it to (low price, great terms or both)
2. Gain control of the home so that you can "show it around" without threat of losing it
I'm suggesting that you might want motivated sellers--sellers with a need to sell--to manage to buy houses at a discount or who will permit you to put the home under contract with a 30 or 60 day closing period so that you have time to locate your buyer.
Motivated sellers ought to be the key to your real estate goal setting. So, do you imagine me? Great, so here are 3 recommendations on motivated seller goal setting.
Tip #1: Motivated Seller Quality Comes From Quantity
While you might have goals about converting x quantity of potential sellers to actual sellers, you'll need to realize that you might want to sift and sort through a lot of sellers to locate truly motivated ones. The opportunity of you getting a motivated seller after conversing with half a dozen sellers is pretty low. Despite having super marketing materials and a wide variety of what I can assist, we typically need certainly to undergo about 10 sellers to locate 1 that's motivated enough that we could make the offer work.
Tip #2: Write Down A Specific Number And Track It Daily
"My goal is to speak with lots of motivated sellers." Utter nonsense. You need to have a certain number to speak with in a certain time frame and track the outcome daily.
"My goal is to speak with 50 motivated sellers each month." Getting better. Every day you'll need to see if you're on course to achieving your goal of conversing with 50 motivated sellers that month. Or even, you'll need to ramp up your marketing to get more motivated sellers calling.
On our Real Estate Investor Database (the ULTIMATE contact and business management tool for Real Estate Investors), we've only a little graph at the top of almost every page that shows you the "goal line" for how many motivated sellers you'll need to achieve your goal and where you are. If you are not meeting, the target it turns up red. If you have met your goal for the day, it's green.
Tip #3: It Is Far Better To Sift and Sort
If you've have tried to produce a marginal deal work and found out the hard way so it can cost you large amounts of time, money and energy you may start getting more selective in your deals. Here's some good advice that I received from a number of my mentors:
"Don't try to produce a marginal deal work, go look for a better deal."
If you have 10, 20 or 30 sellers calling in each week, it is easier to say no to a property that you are not 100% sure of... maybe the value of the property is questionable. Maybe you do not just like the looks of the problem of the roof. Perhaps you don't trust what owner is telling you. If you have dozens of other sellers to speak with, it's much easier to say, "I'm planning to pass" and move on.
By the way, you'd be surprised at how much better the offer gets once you really do walk away and they return to you weekly, month or almost a year later.
So, as you begin setting your goals, remember that while other goals are important, the absolute most critical and key goal for real estate investors is the target you set for motivated sellers.
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