Do you need a chunk of cash, like ... soon?
Quick-turning single family homes is an excellent way to generate four and five figure paychecks within thirty to sixty days. Great stuff! The key to it working though is buying cheap.
The cheaper you buy the house, the hotter the deal is, the quicker your retail investor wants to close, the sooner you get paid. So, how can you generate a steady flow of motivated sellers calling you with houses you can buy cheap, cheap, cheap, you can quick-turn for quick cash.
The first thing to do is think about is who is going to be motivated enough to sell their house as cheap as I want to buy it. By far the biggest motivator for selling cheap is vacancy. When a house is vacant it costs the owner money and it deteriorates in value every month it is not occupied.
Another motivator is the house being in bad condition. Poor condition takes the house out of the general retail market and severely reduces the potential buyer pool. If no-one want the house the price must come down.
Next, draw up a marketing plan for the lead sources you can tap that will produce owners of vacant homes in poor condition. It doesn't have to be slick or sophisticated, a yellow pad is fine. Simply list out the lead sources you are going to use, and next to each lead source put a deadline for having them implemented and producing leads.
Here are 7 lead sources for houses you can quick-turn to generate quick cash.
1) Banks: These are the ultimate motivated sellers. Their charter with the government requires them to keep properties they take back at a low level, so they are constantly trying to move REO property off their books. You could say that banks are junker factories. Their whole process just produces vacant, ugly houses you can quick-turn. The foreclosure process causes neglect and sometimes willful damage from the original owner. The bureaucratic processes once the bank owns the property means it is sitting vacant for months, being neglected, often vandalized. Then it is listed by a realtor who prices it unrealistically high, and it sits vacant for another six months, continuing to deteriorate. If retail buyers even look at it they quickly eliminate it from consideration, realizing it requires more work to be livable than they are willing to do. So the property sits on the market even longer, vacant, deteriorating more, and finally comes to the notice of investors.
2) Realtors: For a start, almost all banks have their properties available through realtors, so if you want to make offers on bank owned property you have to team up with a good realtor. But (good) realtors are also highly networked and are constantly working to achieve the hallowed status of generating 100% of their business through referrals. This comes from them having high integrity and delivering on their word. Developing a relationship with a good realtor results in a steady stream of junker listings, from all types of sellers, not just banks.
3) Flyers: After working with a good realtor and making offers it won't be long before you identify the areas of town where most "deals" are located. Once you have defined this area, call it "Junkerville", you can now focus on it because it will provide the highest return on your time and advertising dollars invested. Your goal for Junkerville is to achieve "top-of-mind awareness" with all it's residents and extract every opportunity that comes up. You want to be a household name in this area with your name associated to 'buying quick for cash' in everyone's mind. One of the best ways to flush out motivated sellers in Junkerville is with flyers. Use flyer distribution companies to put your flyer on every door in the target area. Use college students if no distribution companies exist in your town. A flyer drop once a month is good, twice a month is better.
4) Signs: Signs are a powerful tool for generating leadflow. Now that you have identified Junkerville, put signs high up on telephone poles in the high traffic areas. Gold 12 x 18 coroplast signs with horizontal ribbing are best.
5) Classified Ads: Locate the local newspaper (probably a weekly) that is distributed in Junkerville and place a classified ad in this publication. Use the ad copy, Quick Cash for your house. Any condition. Call Now: xxx-xxx-xxxx, all bolded. Make it a five line ad rather than a three line ad with the top line and the bottom line empty, so your ad stands out. Local papers have cheaper rates so cost for this should not be an issue. You may be surprised to find you are the only quick-turn entrepreneur advertising there. Resist the urge to advertise in large daily papers that are distributed all over the city and more expensive
6) Display Ads: Place a 3 x 2 display ad in the local paper servicing the Junkerville area. The best display ads are in an editorial format that makes it look like one of the stories published by the paper. Use a powerful, benefit-telegraphic headline and do your utmost to have the ad placed in the top right corner of the right hand page as close to the front of the paper as possible.
7) Postcards: Direct mail is a very useful tool for lead generation because it allows you to target so precisely. Postcards are very effective direct mail pieces because they are cheap and don't require opening. They are ideal for delivering the message of 'Quick Cash for your house.' There are two ways to use postcards to generate quick-turn deals:
i) Saturation mailing within Junkerville to flush out motivated sellers. Call the Postmaster at your local post office to find out the zip code and carrier routes within Junkerville. The call your title company and get them to generate a list of all of the names and addresses for houses within those zip/carrier routes (use a list broker if your title company won't provide this for you). Send the list and the postcard template to a mailing service to print and apply the mailing. If you trust the mailing service vendor, let him deliver the batch to the post office, if not, pick up the completed postcards, check they are all there and post them yourself.
ii) Targeted mailing to foreclosures outside of Junkerville. Preforeclosure is a hotly contested area so it pays to target more precisely to a specialized niche so you can appeal directly to their special problem with your mailing piece. The easiest way to create equity in deals you can quick-turn is to target houses with big seconds in default. The sellers are unable to sell because they have no equity, sometimes negative equity, the lenders holding the 2nds are in a no-win situation, about to be foreclosed off and losing their entire investment. These are relatively easy deals to negotiate. Get your title company to generate the list for you (hire a student to go to the Clerk's Office daily to compile the day's filings for you if your title company won't give you the list) then mail them weekly until the foreclosure sale.
Putting all of these lead sources into play will generate a steady, if not overwhelming, flow of highly motivated sellers calling you every day. Once you have this leadflow coming in it's important to adopt a mindset of "next". Don't get hung up on any one seller.
By: Aaron Emmett