If you should be a real estate investor or considering becoming one, you realize (or soon will know) that real estate investing is about 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 achieve most if not all your other goals, then doesn't it seem sensible to concentrate on the motivated seller part of one's goals, at the least at the start?
Anyone looking at my portfolio of audio CDs and courses will quickly find a pattern; over half of the titles are about finding motivated sellers. Exactly why is that? Let's think of it.
Let's say you've a target to make $10,000 per month from owning rental property. To get rental property that provides you with excellent cash flow, you will need to purchase the houses which have strong rents and try to purchase them as inexpensively as possible. How will you buy houses inexpensively? You will need to locate sellers who've reasons to trade you equity they have in their house for an answer for their problem.
The cheaper you should buy the house, the more cash flow you are able to generate from the house and the quicker and more safely you are able to achieve your goal of generating $10,000 in rental income. Try buying houses for full price and generating rental income from their store quickly. In every but a few markets, it's very hard to do (if not impossible).
But wait! You say your goal would be to generate income from wholesaling property... you don't need to generate cash flow as a rental. Well, motivated sellers are much more crucial that you you.
Maybe you have tried to place a residence under contract with a un-motivated (read that as inflexible) seller? It may be tough. In the event that you want to put a residence under contract so that you can wholesale it to another investor for a 4 or 5 figure payday, you NEED to accomplish two things:
1. Make the offer very attractive to the investor you are wholesaling it to (low price, great terms or both)
2. Gain control of the house so that you can "show it around" without danger of losing it
I am suggesting that you'll require motivated sellers--sellers with a need to sell--to have the ability to buy houses at a discount or who'll enable you to put the house under contract with a 30 or 60 day closing period so that you have time to locate your buyer.
Motivated sellers must be the key to your real estate goal setting. So, do you imagine me? Great, so here are 3 tips about 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 will need to understand that you'll require to sift and sort through lots of sellers to locate truly motivated ones. The opportunity of you finding a motivated seller after conversing with half dozen sellers is pretty low. Despite super marketing materials and a wide variety of what I can assist, we typically need to undergo about 10 sellers to locate 1 that's motivated enough that individuals can make the offer work.
Tip #2: Write Down A Specific Number And Track It Daily
"My goal would be to speak with lots of motivated sellers." Utter nonsense. You need to have a certain number to speak with in a certain period of time and track the outcome daily.
"My goal would be to speak with 50 motivated sellers each month." Getting better. Each day you will need to see if you're on track to achieving your goal of conversing with 50 motivated sellers that month. Or even, you will need to ramp up your marketing to obtain additional motivated sellers calling.
On our Real Estate Investor Database (the ULTIMATE contact and business management tool for Real Estate Investors), we've a little graph at the very top of nearly every page that demonstrates to you the "goal line" for the number of motivated sellers you will need to reach your goal and where you are. If you should be not meeting, the goal it shows up red. When 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 create a marginal deal work and discovered the hard way so it may cost you large amounts of time, money and energy you might start getting more selective in your deals. Here's good quality advice that I received from several of my mentors:
"Don't try to create a marginal deal work, go find a better deal."
When you have 10, 20 or 30 sellers calling in each week, it is a lot easier to express no to a property that you're not 100% sure of... maybe the worthiness of the property is questionable. Maybe you don't like the looks of the situation of the roof. Maybe you don't trust what the vendor is telling you. When you yourself have dozens of other sellers to speak with, it's easier to express, "I am planning to pass" and move on.
By the way, you'd be surprised at how much better the offer gets whenever you really do leave and they come back to you per week, month or almost a year later.
So, as you begin setting your goals, bear in mind that while other goals are essential, probably the most critical and key goal for real estate investors is the goal you place for motivated sellers.
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