Finding Motivated Seller Data – Tips For Profitable Deal Flow

Finding motivated seller data as a contributor to profitable deal flow in real estate investment can be approached in a number of different ways. These ways will differ depending on what kind of real estate you are interested in investing in — single-family residential, multi-family residential, commercial, etc. Typically, harvesting motivated seller data results from prospecting — sifting through existing databases — through marketing, through professional data mining, and through old-fashioned networking. Follow below for a list of seven steps towards aggregating and applying motivated seller data to establish a profitable deal flow. 

Finding Motivated Seller Data through Prospecting and Marketing

Profitable deal flow is largely a numbers game. Investors should be constantly on the look-out for new deals. These deals might form around listings currently on the market, those recently removed, or those that have not yet gone on the market. Quantity comes first in profitable deal flow, not necessarily quality. You can find motivated seller data on your own by sifting through public sources — e.g. courthouse documents, MLS data, Connected Investors. Looking through tax documents can be especially helpful for determining how motivated a homeowner might be to sell. Delinquent tax records are frequently pulled by researchers. 

When searching for motivated sellers keep a lookout for sellers falling into these three main demographics: sellers looking to relocate, sellers facing a personal issue, and sellers at risk of foreclosure. Just be sure to acquaint yourself with any special rules surrounding the sale of these types of properties. As you aggregate data, consider establishing a team to help you build a prospecting system. This system will allow you to contact listing agents and brokers as soon as you establish interest in a potential investment. Creating multiple avenues to deals — through varied marketing techniques — will likely generate a profitable return and help form a self-reinforcing deal flow.

“Lean In” to Old-Fashioned Networking

Focusing solely on marketing and prospecting narrows opportunities to find quality deals. For best results, investors should mix prospecting — which often involves cold-calling and emailing, Facebook marketing, and sometimes ad-buying — with old-fashioned networking. Widen your net — and thereby your access to quality deals — by enhancing relationships. Networking is an intangible but vital element of real estate investing. Clothier recommends establishing new contacts by attending “seminars and conferences.” He also suggests signing up for “professional networking events” when possible. These types of events remove a significant amount of work for you. Clothier writes that “the organizers have already done all of the hard work to promote and get people there specifically for you to meet.” 

However — in a time of self-quarantine and social distancing — you might also consider networking through solely online sources. These might include social media, hosting online classes, and sponsoring or mentoring others. Forming positive relationships in the industry will put you in a great position to be the first call when a new listing goes live. You might even be contacted before the listing hits the market. 

Consider Working With a Data Provider

A data miner can offer information otherwise closed to you. They can provide lists of wholesale sellers, bank-owned real estate, short sale listings, and new builders. Other mined data that might be available could include “real estate auctions,” “updated foreclosure listings” that are not yet publicly available, and for-sale-by-owner listings. Additional demographics of motivated sellers — such as recent divorcees (made public in divorce filings) and those who have newly declared bankruptcy — can also be aggregated and delivered to clients by data mining companies specializing in real estate. Software platforms like Connected Investors offer this kind of data — e.g. available investment properties, new deals, access to developers, community connections, and more — curated both for beginners and for the more experienced investor. Connected Investors is a real estate investor marketplace and community. Inside you can connect with a network of real estate entrepreneurs in your town and all across the nation. The Connected Investors platform is designed to help you connect-the-dots to financial freedom through investing in real estate – Whether that means helping you find and fund your first investment property or expand your current real estate holdings. Every day new investment-grade properties are added to the marketplace, investors join the network, and resources are shared in the many active forums. 

Connected Investors provides you with an ever-growing library of information provided by the best in the business on investment techniques and real estate strategies for beginners and experts alike.

Leverage Your Own Investment History

While available capital is a key element of securing deal flow in real estate investment, your history as an investor is also significant. While you might have the capital to make a list-price offer, the owner or representative of that property might choose to forgo it. Instead, they might choose someone with a stronger investment history. As such, do not shy away from putting your investment history front and center. Any priors will be major contributors to your deal flow by demonstrating existing confidence in your ability to carry the property forward. Having a strong history of prior deals in the market is especially significant for off-market deal access. Access to the best deals on and off-market will typically emerge from your own credibility. Public knowledge of your activity in the market will make you a first-call for many brokers — especially when they have a motivated seller.

Know Who the Decision-Maker Is in Every Situation

Chatting with the junior partner at a brokerage might give you access to up-and-comers in the industry. This can be great for the long-term health of your investment business. However, knowing who the decision-maker is in each deal is key to placing the winning offer on a listing in the short-term. To determine who is in charge, find out where the money is going. If the listing agent stands to make the most in commission, focus on the listing agent. They will likely be the most motivated party outside the direct owner. In order to be successful and round out your deal flow, you need to understand who controls the transaction and incentivize that person. 

Learning who to target to bring you the deal — the realtor who gets the commission or the seller him/herself– is always vital. Though the decision-maker might be the client, it might also be the principal. As such, do your research to determine who will control the deal flow and focus on building a relationship with that person first. Be polite and acknowledge their communication preferences as well — if they prefer email, contact via email, but if they prefer phone, contact via phone. 

Follow Up — Even If You Don’t Expect to Get the Deal

Follow up on every property you place an offer on and every investment opportunity you inquire about. This strategy speaks to networking in some ways, as it will demonstrate your ongoing interest to brokers and lenders. Following up on a deal will make brokers and agents more likely to call you for the next deal. This is important even if you know the deal has closed and your offer has been rejected. Demonstrating ongoing interest will go a long way to establishing good relationships with anyone involved in the first deal. Additionally, following up might afford you access to new properties before they hit the market. 

Summary 

By implementing appropriate marketing techniques, focusing on networking, and properly sourcing and organizing motivated seller data, you will be much more likely to secure profitable real estate investments.