The Science of Flipping - Episode 55 – How to Find Motivated Sellers | Real Estate Investing Podcast

Episode Date: December 8, 2014

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Welcome to the Science of Flipping Podcast. I'm your host, Justin Colby. What is up, guys? Welcome to the Science of Flipping Podcast, episode 55. I apologize greatly for the audio. Please forgive me. I've actually been on the road for the last three weeks. So I'm in my hotel room. I'm in my hotel suite. I'm overlooking beautiful Columbus, Ohio, if that is something you can actually say. But I'm in the wonderful city of Columbus, Ohio, working with some of my high-level students, and so I just want to apologize because I'm working off my computer, so the sound might not be quite as good as you would like, so I greatly apologize.

Please forgive me. As a matter of fact, I will see if this helps. Hopefully, this go-ahead and helps, But again, I'm in Columbus, Ohio. I've been traveling for about the last three weeks working with some of our highest end students and clients who hire me and my team to coach them and help them get to the next level. So if you are someone who loves listening to the podcast and really wants to take their game to the next level and like to discuss directly with me what that would look like, please email me directly. Info at thescienceofflipping.com. Again, it's info at thescienceofflipping.com. and I will personally reply to you and we will set up a call to review what it would look like

to become one of our high-level coaching students or clients that we can help you get to the next level. Even if you're just starting and you just need some one-on-one mentorship, please shoot me an email directly at info at thescienceofflipping.com and I'll personally reply to you. Again, welcome to the podcast. This is episode 55. Very excited. Thanksgiving was last week, so happy holidays to everybody. I hope everybody had an absolute wonderful Thanksgiving. I know I did. I spent time with my family and friends and I just cherish those moments because really all life really is about

is about the time you have and the moments you share with your loved ones. So please be thankful for everything you have. I know everyone has their own hardship stories and difficult things are going through but be thankful for waking up in the morning and having friends and having family and having a career and a job and being an entrepreneur. Just be thankful for all of it. And hopefully every day you wake up with that thankfulness in your heart and an attitude of gratitude. So if this is your first time to the podcast, this podcast is all about creating a lifestyle by design, creating a business through systems and organization, creating a seven-figure real estate investing business through wholesaling and fix and flipping.

And so every week in every podcast episode, I try to give you my all and I give you the exact systems we use in our business here in Phoenix or Scottsdale, Arizona where our office is. What I'm trying to do is teach you some of the things that I've learned over time and how I've created a lifestyle where I can be on the road for the last three weeks. I've literally haven't been in Phoenix for three straight weeks. Our business is still going. We're closing on a flip on December 10th. We have two flips going.

We just sent out 10,000 marketing pieces. So my business continues to go even though I'm not there. And I've been able to build a business with the systems and organization that I teach you guys each and every week on this podcast. So thank you guys for being very loyal listeners. That's what this podcast is about is being able to develop a true business and not just a high paying job where you feel like you need to be in the business each and every day and have to be in the office and you got to work 10 or 12 hours a day. That's not what entrepreneurship is about. Entrepreneurship is about living your life by design, having the time to spend with

friends and family and not in your office, right? And so, you know, as real estate investors, a lot of times you feel like you're doing every last thing in your business. You do A to Z, you do everything. If there was an organizational chart, you is in every position of that organizational chart. So what I try to do in this podcast, again, is get you out of your own way, help you develop systems and systemize your business so that no longer is the case, right? So again, if this is your first time, I offer a free e-book on the website at thescienceofflipping.com. Go to thescienceofflipping.com and get the free ebook that I have developed about the 15 most costly mistakes you can make in today's real estate

market, right? Every real estate market tends to be slightly different, but these are the 15 most costly mistakes. It is absolutely free. Get over to the website, put in your information, and get your e-book. At least understand what mistakes you can try to avoid, plus listening to this podcast will absolutely help you avoid those mistakes. So now that that has all been said, guys, I want to review something that is super important. A lot of my students will say, I don't have your marketing budget. And we have a pretty big marketing budget, but we've been doing this now since 2007. And we've done very well for ourselves. And it's been one of those things that it wasn't always that way. And most of you guys know my story, but we started out flipping homes in 2007 when the entire real estate market was nothing but short sales. Well, the banks didn't know how to handle short sales.

So even though we got our offers approved by the seller, the bank didn't approve our offer for nine to ten months. Well, at that case, how are we ever going to make any money? And so for the first nine months of business, me and my business partner, Eddie Rosefield made $0, not one penny for the first nine months. And that greatly affected us, right? We didn't have any income coming in. I lost my home. I lost my car, but I didn't give up. I knew I could succeed at this. I know we could succeed at this. He has a very similar story. He lost his home. He lost his car.

He went through financial struggles and he had a wife and a kid. And so, you know, we went through very similar struggles that some of you may be going through, but we wouldn't give up. And some of you sometimes write me and, you know, contact me saying, you know, I don't have your marketing budget. So how am I supposed to get all these deals? Or how am I supposed to contact these sellers where I don't have $10,000 a month to send direct mail? And so what I'm going to review with you today simply is how you can take a list.

Okay, so what I first want to review is where do you get a list of motivated sellers? And how can you make that as cheap as possible? Where do you get it and how do you make it cheap? And then I want to tell you what you can do with that list instead of sending direct mail to the list, which is what I choose to do because I truly believe it is the best strategy for contacting motivated sellers, I will review with you how you can actually find their phone number and find their contact information. And so you have two options is to either drive by their home and drop off a mail piece and maybe even door knock and or find their contact information and give them a call. Okay, so let's just simply start out with where do you get your list from?

Well, first of all, what list do you want? Now, what I focus on is high equity, free and clear, and vacant properties. I like the three combinations. Now, does it have to be vacant? Absolutely not. For example, some of the best deals come from people who need to get out of their home and they need to get out within the next week. So they don't have to be vacant, but I definitely focus on high equity and free and clear properties. Now, how would you do that? Well, list providers such as listsource.com, again, listsource.com, allows you to search sellers by mortgage origination date.

And what mortgage origination date truly means is when did they buy the home? Well, what I do is I go into listsource.com and I go into mortgage origination date between 1970 and 2003. And the reason why I do that is because likely they will have equity or own their home free and clear because they bought it before the rise and before the crash of the real estate market. So they would likely have equity or own it free and clear, let alone if they still have the home. That's, you know, 1970 is 44 years ago. That's a long time to own a home. So again, they likely will have room to wiggle

and be able to sell their home and put some money in their pocket and can truly negotiate with you. Now the reason that's so important is because as a wholesaler and a fix and flipper, I just don't like dealing with short sales. I don't like dealing with bank owns. Of course, as I'm going to buy a home, I'll buy a short sale or I'll buy a bank owned. But nowadays the banks aren't giving the type of discount that they used to

on those type of properties. So the reality is I just want to go after the person who can really make the decision, the real decision maker, and that's the homeowner. So again, I stick to high equity and free and clear properties. Okay, so that's really what I'm going after. Now, I gave you one source to find a list, which is listsource.com. Now, I make no money off them. That's a separate company, and that's who I will use to buy a list. Now, the list does cost some money, but it's very, very cheap. I think the last time I bought a list of 1,000 people, it was like 4 cents a lead or 6 cents a lead for 1,000 people.

So obviously, it doesn't cost too much. So obviously, at 6 cents a lead, it would be 60 bucks to buy 1,000 leads. So if you bought 10,000 leads, it's $600. Not the end of the world. However, I do understand some of you might not even have $600 to buy 10,000 leads. So you need to go to your title company. Your title company can do the exact same search, exact same search. So reach out to your local title company or a title company that you have a great relationship with and ask them to pull a list of homes in the zip code that you want to be investing in.

You need to have the zip codes in the areas that you want to be investing in and ask them to pull a list of people who bought their homes between 1970 and 2003. They will most likely do it for free. If there is any cost, it is very minimal, but I promise you they'll do it for free because they want your business, okay? So they'll do it for free because they want your business. And those are the two places that I go after to find a list. Now, I have a product that actually scrapes the county recorder's office every single month for free and clear and high equity lists.

Now, the product is called Smart. It's called Motivated Sellers. It does the exact same thing for cash buyers and private lenders. There is a cost to that product, but it is my product. If you are interested in something like that, please just email me again at info at the science of flipping dot com. We will be happy to get you over that product. Obviously, there is a cost. So if you are not looking to spend money or much money at all, I would use listsource.com or your title company can pull the same list. And the list you want

are people who bought their home from 1970 to 2003. Or another way to say that is people who have a mortgage origination date between 1970 and 2003. Now, what do you do with that once you have that list? Because all you have there is a name and the address of the home that you can send mail to. Well, what I do is what's called skip tracing. And I want to tell you a couple of websites that you can use for skip tracing. Now, skip tracing is basically what's called a reverse lookup. Most of these websites are very cheap if you do one-offs, but you can

also buy a monthly membership. It gets a little bit more expensive, but you can run as many names as you want through these websites on a monthly membership. So first, I'll just simply talk about peoplefinder.com. If you go to peoplefinder.com, you can put in your first name, last name, city, and click search, and it will give you as much information as possible. Now, reverse phone search is really what you want. You really want to find the phone number, or I'm sorry, find people is what you want, and then if you have the phone number, you can find the people. Okay, so you really want to try to find that phone number. Now again, there can be a monthly subscription, so use this as long as you can until you need

to start paying for them. Whitepages.com, Whitepages works the exact same way. All of these services work the exact same way. They'll all have a different small cost to them, but they also will have monthly memberships, which is a very nominal fee. So again, you need to have a little money, but you don't need $10,000 a month to go find these people, right? So the first resource I gave you was peoplefinder.com. The

second was whitepages.com. The third will be intellius.com. Intellius is spelled I-N as in Nancy, T-E-L-I-U-S as in Sam. You work them all the same way. And all of them can give you a monthly membership, right? So you put in the first name, the last name, and the address, and you click search, and it will likely pull up their phone number. Now, none of these services are 100% guaranteed to pull up a phone number. None of them are. But you have a very good chance. I would probably say you have a 75% chance of getting a phone number.

Okay, so if you have 1,000 names and addresses, you probably can get 700 to 750 of them. Now, lastly would be LexisNexis.com. LexisNexis is spelled L-E-X-I-S, L-E-X-I-S, N as in Nancy, E-X-I-S.com, LexisNexis. And it works the exact same way for a membership. Now these are the four resources you can use. And what you do at that point is now you have their phone number and you call the homeowner. You know, and you say something as simple as this. Hi, Mr. Homeowner. My name is Justin with Phoenix Wealth Builders. I'm a local real estate investor. I'm calling just to reach out to give you another option to selling your home besides listing it on the MLS. Have you given any thought to selling your home? Well, are you a real estate agent, Mr. Justin? No. Actually, I'm a local real estate investor.

I buy cash. I close quick. There are no fees or commissions or repair costs when working with me. So as a matter of fact, a lot of our clients and customers really love working with me rather than listing their home with the real estate agent. Do you have any interest in selling your home? Something that simple is all you say to them. Some people are going to say, you know, I do. Some people are going to say, no, thank you. Please don't call me again. Some people might be a little bit more rude and just hang up on you. But the key here is you are finding the seller without spending a lot of money on marketing.

And that is what this podcast is all about, to teach you how to do that. You're either going to spend, I say this constantly to our high-end students and the students that we bring on to consult with, you're going to spend one of two things. You're going to spend money or you're going to spend time. But either way, you're spending one of those two things. So if you don't have the money, you're going to spend the time to do it and do it right. Okay. So that's really what I have for you guys today. Again, if you're interested in talking to me further about hiring me as a consultant for you and coach for you to bring your business to

the next level, or at least start your business, please email me at info at the science of flipping.com. Um, we are finishing out the year very, very strong here in Phoenix. I'm currently in Columbus, Ohio. Um, finishing working with one of our high end students. It's actually a partnership and they're absolutely awesome. They're already crushing it. Um, so I wish you a great rest of the year, and I look forward to continuing to put out these podcasts each and every week for you guys, and I will see you on the flip side, guys. I'm out of here. Peace.