It’s pretty amazing how many good deals I’ve done over the years on houses that were vacant and had no “For Sale” signs on them. The reason there have been so many is that I began focusing on them early in my investing career, and they have remained a primary and integral part of my business ever since.
What I love about them is that when there is no “For Sale” sign, it’s reasonable to presume they are not in the MLS and are not being marketed, at least with any degree of effort as F.S.B.O (For Sale By Owner) properties are.
…Which means no one knows about them!
If they’re not in the MLS, the investors who are focused on the MLS, which is the vast majority, don’t know about them. Similarly if they’re not being marketed as F.S.B.O., investors who are focused on that part for the business are not seeing them either. Then if you consider that we all suffer from the “we don’t know what we don’t know” syndrome, it becomes easy to see why this is an almost stealth segment of the investing market.
And Here’s Where Things Get Interesting…
What I have also come to learn over the years is that most owners of vacant houses are motivated in any of a number of ways, even if only mildly – but they are motivated none the less. Property taxes, insurance, weather, liability and the “3 V’s”, vermin, vagrants and vandals, are certainly chief among a huge list of potential motivating factors. Another big motivating factor may only come when you contact the owner and suggest they ask their insurance agent if the property is actually covered while it is sitting vacant. It almost for sure isn’t, and many folks are unaware of that. I have also found that private owners are particularly motivated around the time(s) the property tax bills hit them. Property taxes in most communities are ugly if not unfathomable.
I find that vacant houses tend to come in 2 primary “flavors”: Bank owned and privately owned.
Now, there are some exceptions to this but in general, it’s one or the other. Both certainly offer significant opportunity but are very different in terms of how you approach them. In particular, with bank owned properties, you will almost always deal with a Real Estate Agent, will need verifiable proof of funds and cash to close – the days of “floating the funds” are long over. Then with private owned properties, there won’t be an agent, you probably won’t need Proof of Funds and with an assignable contract, you won’t need the funds to close, because in fact, you won’t close at all. Instead you will effectively sell the contract and be paid to go away. The trick with private owned vacant houses is finding the missing seller. In fact, when it comes to locating the seller, what I have learned is that the harder they are to find… the better the deal. I actually prefer properties where the site address and the owners address on file with the tax assessor match. When the site and mailing address match, it sure looks like a dead end to most, and that’s just fine with me because I know I can find them.
Now combine that matching address scenario with free and clear or high equity and, oh my gosh, you’ve got a big fish on the line. Click here to get access to the 100% automated tool I use to search for these BIG FISH nationwide!
So how did I originally become interested in
vacant houses with no “For Sale” signs?
It was actually a Real Estate Agent that clued me in. She was focused on Vacant houses as a stealth way of acquiring listings and had gotten very good at tracking down the owners. She was whooping her competition and they had no idea how. She was very careful when it came to sharing the details of her strategy but saw no threat in me because I wasn’t an agent. In fact, she encouraged me to focus on them as an investor, for the same primary reason she was focused on them herself. No one knows about them! Then, what we began doing was sharing leads back and forth and supporting each other’s businesses. So when I would come across a private seller who wasn’t willing to sell at a price or in a way that worked for me, I would encourage them to list their property and referred them to her. When she found a seller that didn’t want to list, for any number of reasons, she would refer them to me. We made beautiful music together and from it came a couple of important career lessons for me.
Focus on Vacant Houses and…
Always look for ways to refer stuff back and forth with your favorite agent. It’ll take the relationship to a deeper, more profitable level.
So, I encourage you to focus on vacant houses for all the reasons I’ve stated above and when you do, watch what happens to your business, and your income.
PS. If you would like more info on:
Finding Vacant Houses
Finding Missing Sellers
Verifiable Proof of Funds
No Fee Transactional Funding
Finding Motivated Buyers
Automating your business
Building your brand
Support from me and my team
…Then give us a call at (607) 936-2200 x1.