The #1 Factor Great Real Estate Deals Are Built On – Motivation

September 19, 2007 by

Money Bag HouseBeing a real estate investor, I’m always on the lookout for a good deal. That’s probably no surprise but if you ask 99% of all real estate investors I bet you the #1 important factor in real estate to them is location location location. Although this may be true for finding a property you want to live in, it’s not always true in finding a seller who has strong motivation to sell. This is really the first key ingredient in finding a good deal to invest in.

So what are some key things to look for when searching for a motivated seller? First of all I look for the obvious hints either online or in the classified ads where sellers say things like “must sell… another country next month” or something like “currently paying two mortgages and must sell home immediately”. Now those are the easy ones but for the more typical properties you usually have to call several sellers and ask them some questions such as

  1. Are you under any time crunched to sell your home?
  2. Is there anybody living in the property currently?
  3. How long has the property been on the market for?
  4. Why in the world would you consider selling such a wonderful property such as this?

all these questions should give you a pretty good clues as to why and if the seller has a strong motivation to sell. If you do discover one of these properties on your list could be a real bargain you then take the next step and talk with them about pricing and terms. For any real estate deal to ultimately be a winner the numbers must make sense. And lastly take into consideration where the property is located and what condition it currently is in. If all three of these factors add up than it probably makes sense to move forward and make an offer on the property.

Now remember the #1 factor great real estate deals are built on is motivation. The #2 and #3 factors are also important (pricing and location) but don’t fall into place unless the #1 factor comes first.

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12 Responses to “The #1 Factor Great Real Estate Deals Are Built On – Motivation”

  1. Real Estate Attorney, Miami Beach on September 20th, 2007 10:51 am

    It is often useful to ask a lot of questions. My most successful real estate investor clients find out who is motivated by asking the local Gossip about personal issues, such as engagements, preganancies, graduations, work promotions, marriages, firings, hirings, etc. These individuals often are or will soon be very motivated to sell. Neighbors of sellers will often be more than happy to share which sellers in a building are the most motivated and why!

    http://www.southptc.com/

  2. Real Estate Guru on September 20th, 2007 11:56 am

    Those are good places to look too. It’s all about getting the inside scoop by either a “bird dog” or gossip places like you mentioned. Thanks for your comment!

  3. Sal on September 29th, 2007 11:00 pm

    These are all great tips. I’ve also learned during my time as an investor how important it is to keep an open mind on various types of markets. I’ve started to research real estate in foreign countries by going to on-line newspapers and other types of region specific websites. Through a Costa Rican newspaper called the Tico Times I was able to find the real estate website http://www.buysafecostarica.com . My wife and I successfully purchased our first condo on foreign soil through them and we are currently researching property in Australia through http://www.realestate.com.au . I would encourage investors who enjoy a good challenge to utilize the web for tapping into the foreign real estate markets.

  4. Emmanuel Cervantes on October 1st, 2007 5:14 pm

    In any market both Sellers and Buyers exist. It is those individuals that live within their means that are able to build wealth and own real estate. Those who attempt to take on too much and do not have the reserves to weather the storm are the individuals who find themselves in difficult situations.

    Will the recent slashing of interest rates really stimulate the market? We have witnessed it devaluize our dollar, but not do much for the market. In fact, the week that rates were cut, lenders did not pass on those savings to consumers.

    With creative loans a thing of the past and tight loan restrictions, the pool of qualified buyers continues to shrink. Prices have yet been reduced to a point where the average person can afford to buy.

    The key word Bernanke used in his address after cutting interest rates was, “price correction.” That is exactly what we are seeing, a price correction. The inflated values that were placed upon homes are now returning to a normal state. Until prices become more reasonable, I do not foresee the market picking up.

    On the other specturm, owners of multi-family property are reaping the benefits of the current market. High prices and tight restrictions force people to rent, while foreclosesures and Condo-conversions have displaced occupants. The vacancy rate in Los Angeles is lower than ever, interest rates remain at a historical low and the cost of rent has continued to increase. Multi-family owners are in a great position.

    For more information on Multi-Family sales, please visit http://www.AptBldgTrader.com

  5. Veliko Turnovo Hills on October 1st, 2007 11:37 pm

    A seller’s motivation to move items quickly also comes into play with price.

  6. Real Estate Guru on October 2nd, 2007 11:14 am

    That’s very true Veliko. If a seller already purchased another property and they’re paying two mortgages, that’s going to be a big motivating factor.

  7. Real Estate Guru on October 2nd, 2007 11:19 am

    Agreed. Multi-Family units are a great safe bet. I’ve purchased several of them in Albuquerque, NM with nice passive income coming in each month. I’m not expecting the 4-plexes to dramatically increase like a single family home would…it’s more a slow safe appreciation. Thanks for your comment Emmanuel.

  8. Dana Chauncey on October 9th, 2007 2:58 pm

    I agree that a good motivated seller makes the deal go much easier for all involved. Some people only consider those in financial distress motivated, but many factors contribute to motivation. If you ask enough questions you will find the motivation that is specific to that seller.

  9. Denton Ward on April 8th, 2008 3:36 pm

    You hit it on the nose when you said that you have to be open to new markets.

    We have located and tested a market in the Memphis market…and most CA investors think, “Investing in Mississippi? Why would I do that?” However, once they see the numbers and have a great experience with us, they are tickled pink.

    As well, foreign real estate can be very profitable. I heard Romanian real estate has exploded off the charts.

    Denton Ward
    http://www.erealtyinvestors.com

  10. Staten Island Real Estate Agent on July 31st, 2009 5:35 am

    Finding out whether or not they are motivated is a skill on by itself. You need too understand how to go about it without being obvious. Flying under the radar is extremely important.

  11. Rickey. on June 17th, 2011 1:32 am

    appreciating once more…
    I really feeling very great when I gone through your articles. You have opened a new way of thinking in my mind

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