If you're a real estate investor or considering becoming one, you understand (or soon will know) that real estate investing is all 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 need motivated sellers, to attain most if not all of 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 taking a look at my portfolio of audio CDs and courses will quickly find a sample; over half the titles are about finding motivated sellers. How come that? Let's consider it.
Let's say you've a goal to create $10,000 monthly from owning rental property. To get rental property that will give you excellent cash flow, you'll need to purchase the houses that have strong rents and try to purchase them as inexpensively as possible. How do you buy houses inexpensively? You need to locate sellers who have grounds to trade you equity they have in their residence for a remedy to their problem.
The cheaper you can get your house, the more cash flow you are able to generate from your 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 all but a few 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 have to generate cash flow as a rental. Well, motivated sellers are a lot more crucial that you you.
Maybe you have tried to place a house under contract with a un-motivated (read that as inflexible) seller? It can be tough. In the event that you want to put a house under contract so that you can wholesale it to a different investor for a 4 or 5 figure payday, you NEED to perform a few 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 need motivated sellers--sellers with a need to sell--to be able to buy houses at a discount or who will enable you to put your house under contract with a 30 or 60 day closing period so that you have time to locate your buyer.
Motivated sellers should be the key to your real estate goal setting. So, do you think me? Great, so listed below are 3 advice on motivated seller goal setting.
Tip #1: Motivated Seller Quality Comes From Quantity
While you could have goals about converting x number of potential sellers to actual sellers, you'll need to understand that you need to sift and sort through a lot of sellers to locate truly motivated ones. The chance of you getting a motivated seller after speaking with six sellers is pretty low. Even with super marketing materials and a wide range of what I will use, we typically have to go through about 10 sellers to locate 1 that is motivated enough that we will make the offer work.
Tip #2: Write Down A Specific Number And Track It Daily
"My goal would be to communicate with a lot of motivated sellers." Utter nonsense. You have to have a particular number to communicate with in a particular time frame and track the results daily.
"My goal would be to communicate with 50 motivated sellers each month." Getting better. Daily you'll need to see if you are on course to achieving your goal of speaking with 50 motivated sellers that month. Or even, you'll need to ramp up your marketing to obtain more 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 almost every page that shows you the "goal line" for how many motivated sellers you'll need to achieve your goal and where you are. If you're not meeting, the goal it shows up red. When you yourself have met your goal for the day, it is green.
Tip #3: It Is Far Better To Sift and Sort
If you've have tried to create a marginal deal work and found out the hard way that it could cost you large amounts of time, money and energy you could start getting more selective in your deals. Here's some great advice that I received from many of my mentors:
"Don't try to create a marginal deal work, go locate a better deal."
When you yourself have 10, 20 or 30 sellers calling in weekly, it is a lot easier to say no to a property that you are not 100% sure of... maybe the worthiness of the property is questionable. Maybe you may not like the looks of the problem of the roof. Maybe you don't trust what the seller is telling you. If you have lots of other sellers to communicate with, it is much simpler to say, "I am planning to pass" and move on.
In addition, you'd be surprised at how much better the offer gets when you do disappear and they come back to you per week, month or many months later.
So, as you begin to set your goals, keep in mind that while other goals are important, probably the most critical and key goal for real estate investors is the goal you add for motivated sellers.
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