If you are 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 a lot of time on goal setting regarding motivated sellers. If you want motivated sellers, to achieve most or even all of your other goals, then doesn't it seem sensible to concentrate on the motivated seller part of your goals, at the least in the beginning?
Anyone taking a look at my portfolio of audio CDs and courses will quickly find a pattern; over 50% of the titles are about finding motivated sellers. How come that? Let's think about it.
Let's say you have a target to make $10,000 per month from owning rental property. To get rental property that will give you excellent cash flow, you'll need to buy the houses that have strong rents and try to buy them as inexpensively as possible. How will you buy houses inexpensively? You need to get sellers who've reasons to trade you equity they have in their residence for a remedy for their problem.
The cheaper you can purchase the home, the more cash flow you are able to generate from the home and the quicker and more safely you are able to achieve your goal of generating $10,000 in rental income. Try buying houses for a high price and generating rental income from their website quickly. In every but a couple of markets, it is very difficult to do (if not impossible).
But wait! You say your goal would be to generate income from wholesaling property... you may not need to generate cash flow as a rental. Well, motivated sellers are even more very important to you.
Perhaps you have tried to put a home under contract with a un-motivated (read that as inflexible) seller? It may be tough. If you are attempting to put a home under contract so you can wholesale it to a different 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 home so you can "show it around" without risk of losing it
I am suggesting that you'll require motivated sellers--sellers with a need certainly to sell--to be able to buy houses at a discount or who'll allow you to put the home under contract with a 30 or 60 day closing period so you have time to get 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 may have goals about converting x amount of potential sellers to actual sellers, you'll need to appreciate that you'll require to sift and sort through lots of sellers to get truly motivated ones. The chance of you finding a motivated seller after conversing with half a dozen sellers is pretty low. Despite super marketing materials and a wide range of what I could use, we typically need to proceed through about 10 sellers to get 1 that's motivated enough that people may make the offer work.
Tip #2: Write Down A Specific Number And Track It Daily
"My goal would be to speak with a lot of motivated sellers." Utter nonsense. You have to have a certain number to speak with in a certain period of time and track the outcomes daily.
"My goal would be to speak with 50 motivated sellers each month." Getting better. Every day you'll need to see if you are on the right track to achieving your goal of conversing with 50 motivated sellers that month. If not, you'll need to ramp up your marketing to get more motivated sellers calling.
On our Real Estate Investor Database (the ULTIMATE contact and business management tool for Real Estate Investors), we have a little graph at the very top of virtually every page that shows you the "goal line" for the number of motivated sellers you'll need to attain your goal and where you are. If you are not meeting, the goal it shows up red. If you have met your goal for your day, it is green.
Tip #3: It Is Far Better To Sift and Sort
If you've have tried to produce a marginal deal work and discovered the hard way that it can cost you large levels of time, money and energy you may start getting more selective in your deals. Here's good quality advice that I received from a number of my mentors:
"Don't try to produce a marginal deal work, go locate a better deal."
If you have 10, 20 or 30 sellers calling in weekly, it will be a lot easier to express no to home that you are not 100% sure of... maybe the worthiness of the property is questionable. Maybe you may not just like the looks of the situation of the roof. Maybe you don't trust what owner is telling you. When you yourself have lots of other sellers to speak with, it is much easier to express, "I am going to pass" and move on.
In addition, you'd be surprised at simply how much better the offer gets whenever you do leave and they get back to you per week, month or almost a year later.
So, as you begin to create your goals, remember that while other goals are essential, the absolute most critical and key goal for real estate investors is the goal you place for motivated sellers.
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