If you are a real estate investor or considering becoming one, you know (or soon will know) that real estate investing is focused on 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 reach most or even your entire other goals, then doesn't it make sense to focus on the motivated seller part of your goals, at least at the beginning?
Anyone taking a look at my portfolio of audio CDs and courses will begin to find a structure; over 1 / 2 of the titles are about finding motivated sellers. Exactly why is that? Let's think of it.
Let's say you've a target to make $10,000 each month from owning rental property. To get rental property that provides you with excellent cash flow, you'll need to buy the houses which have strong rents and try to buy them as inexpensively as possible. How do you buy houses inexpensively? You'll need to get sellers who've a reason to trade you equity they've in their house for a remedy to their problem.
The cheaper you should buy the house, the more cash flow you are able to generate from the 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 them quickly. In every but a couple of markets, it is extremely tough to accomplish (if not impossible).
But wait! You say your goal is always to generate income from wholesaling property... you do not need certainly to generate cash flow as a rental. Well, motivated sellers are even more vital that you you.
Perhaps you have tried to place a home under contract with a un-motivated (read that as inflexible) seller? It can be tough. In the event that you want 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 complete two things:
1. Make the deal very appealing to the investor you're wholesaling it to (low price, great terms or both)
2. Gain control of the house so you can "show it around" without threat of losing it
I'm suggesting that you'll require motivated sellers--sellers with a have to sell--to manage to buy houses at a discount or who'll permit you to put the house 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 believe 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 quantity of potential sellers to actual sellers, you'll need to realize that you'll require to sift and sort through lots of sellers to get truly motivated ones. The chance of you getting a motivated seller after talking to half dozen sellers is pretty low. Even with super marketing materials and a wide variety of what I can use, we typically need certainly to go through about 10 sellers to get 1 that's motivated enough that we may make the deal work.
Tip #2: Write Down A Specific Number And Track It Daily
"My goal is always to speak with a lot of motivated sellers." Utter nonsense. You need to have a particular number to speak with in a particular time frame and track the outcomes daily.
"My goal is always to speak with 50 motivated sellers each month." Getting better. Every day you'll need to see if you're on course to achieving your goal of talking to 50 motivated sellers that month. Or even, you'll need to ramp up your marketing to obtain additional motivated sellers calling.
On our Real Estate Investor Database (the ULTIMATE contact and business management tool for Real Estate Investors), we have only a little graph towards the top of virtually every page that shows you the "goal line" for how many motivated sellers you'll need to attain your goal and where you are. If you are not meeting, the goal it appears red. When you 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 can cost you large amounts of time, money and energy you could start getting more selective in your deals. Here's some good advice that I received from a number of my mentors:
"Don't try to create a marginal deal work, go find a better deal."
When you have 10, 20 or 30 sellers calling in weekly, it is easier to express no to a house that you will be not 100% sure of... maybe the worth of the property is questionable. Maybe you do not such as the looks of the condition of the roof. Perhaps you don't trust what owner is telling you. If you have a large number of other sellers to speak with, it is much easier to express, "I'm likely to pass" and move on.
Incidentally, you'd be surprised at how much better the deal gets whenever you do disappear and they come back to you per week, month or several months later.
So, as you begin setting your goals, remember that while other goals are very important, probably the most critical and key goal for real estate investors is the goal you place for motivated sellers.
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