If you’ve been doing any reading on flipping houses, then you know that foreclosure auctions are not the only way to buy investment properties for your flipping business. In fact, getting to property owners before they go into foreclosure, when they can qualify for a short sale and/or when they’ll be willing to accept a reduced offer for cash, can open up a lot of opportunities for you. For one thing, a lot of times you’ll be able to get into the house to see exactly what you’ll need to do to get it up to market value. That’s something you’ll never be able to do with an auction property, and it’s why I prefer to work with motivated sellers whenever I can.
When you talk to these people, though, you need to realize that they’re probably going through some really rough times. They’re looking at selling a house that’s probably fallen apart and that they may have had to abandon entirely. They can’t keep up with their mortgage for one reason or another, and they’ve gotten behind on repairs. This is a stressful time in their lives, so when you talk to them you’ll want to approach them with compassion and patience. At the same time, you’ll want to know if you should really be making an offer on their house or not, so you’ll need to ask a few questions.
Do You Want to Sell Your House?
First of all, if they’re not interested in selling, you won’t be able to convince them that they should sell to you. If the answer to this question is no, don’t push it. Instead, be nice and give them your contact information if they have a change of heart. “No” isn’t always a final answer, but if you’re too pushy and you try to hard-sell them, it usually is.
Why Do You Want to Sell?
If the answer is yes, you’ll want to follow up by asking why they want or need to sell the house. This could be a touchy subject, though, so be tactful. You might want to say something like, “If you don’t mind me asking, why are you selling the house?” or “Are you selling because you’re moving, or…?” This way, the seller can gracefully decline to give you personal information, but you’ll get some info on why they’re selling, which will tell you a little bit about how much work it’s going to need.
How Long Has the Property Been on the Market?
If the seller tells you that they’ve already listed the house, you’ll want to ask them how long it’s been on the market so that you can get an idea of how stale it is. If it’s been sitting on the market at their asking price for a few months, they’ll probably be pretty motivated to take a cash offer, even if it’s at a lower price.
Can I Schedule a Time to See the Property?
You want to know how much money and effort you need to put into rehabs, so if the property has been listed and/or the seller is ready to sell, you want to get inside and take a look if you can. Go in with an inspector or contractor and look around to determine your best offer.
These are definitely not the only questions you’ll want to ask, but they’re some of the most important ones. Get to know your sellers and their goals, and get a look at their properties, and you’ll be on your way to making good offers and getting more deals on profitable flips.