Why Do You Need Motivated Sellers
You need motivated sellers because they are the people that you’ll be able to negotiate with the best.
One of the most important things in real estate investing is that you are always looking to make a profit. Otherwise, you wouldn’t be investing in real estate right?
The best way to make a profit is when you buy.
And one of the ways you buy or should be buying is by buying from a motivated seller. This means you only look for people that own properties that are motivated to sell.
What does motivation mean?
People are motivated to sell for many reasons. Well, actually there are three main reasons. Death, Divorce, and Debt.
Death
Death means there is a property and the owner dies, or one of the owners dies and some person, maybe a spouse, is now stuck with the property and they are trying to figure out what to do with it. They have to sell it. Sometimes it was originally owned by a parent or somebody who leaves their property to their children.
Now someone owns this property and they don’t know what to do with it. They became an accidental investor or an accidental landlord. Meaning they never intended on owning real estate. They acquired the property which accidentally made them an investor. Now they are trying to figure out what to do with it.
Divorce
Another way someone becomes a motivated seller is because of divorce. This person is now a single person and they are trying to maintain the payments on the property and they just can’t keep up. As result, they are motivated to sell their property.
Debt
The last reason we will cover is debt. As a result of overspending you’ve accumulated a lot of debt. Or maybe it’s not your fault. Maybe it was a result of a job loss, or you’ve moved. There are a whole bunch of scenarios that fall under this debt reason.
Negotiating
Negotiating with motivated sellers is called a business negotiation which is quite simple. You explained to them what you are looking for. Usually, when you are looking for properties from motivated sellers, you are trying to do one of two things with the property.
You are either trying to wholesale it, which means you are trying to acquire the property so that you can give it to somebody who’s going to fix and flip it.
Or you are trying to acquire the property and maintain it and hold onto that property as a rental.
Either way, you want to try to acquire the property at a price that’s as low as possible so that you are making money when you purchase it.
So this is why you want to have motivated sellers. Now it may sound very predatory based on what I’ve just saidc but not at all. Usually, these people are in a difficult situation and they are looking for a solution and you can become that solution.
To recap, when looking for real estate to invest in, make sure you are always looking for motivated sellers.
