{"id":5958,"date":"2018-02-23T12:31:14","date_gmt":"2018-02-23T17:31:14","guid":{"rendered":"http:\/\/camerondirect.com\/?p=5958"},"modified":"2020-05-13T14:38:13","modified_gmt":"2020-05-13T14:38:13","slug":"private-motivated-sellers","status":"publish","type":"post","link":"https:\/\/realestatewealthnetwork.com\/blog\/private-motivated-sellers\/","title":{"rendered":"Pros and Cons: Dealing with Institutional vs. Private Motivated Sellers in Real Estate"},"content":{"rendered":"

The world of real estate investing is full of \u201cdo this\u201d or \u201cdon\u2019t do that\u201d, but do you ever wonder whether you should be doing deals with institutional versus private motivated sellers?<\/p>\n

After all, it\u2019s always good to have options!<\/p>\n

People ask me all the time if I focus on deals that are primarily with private sellers or institutional sellers. And then, the inevitable next question\u2014which is BETTER?<\/p>\n

My answer: well\u2026I actually do a mix.<\/p>\n

I do a lot of HUD and bank foreclosure deals and of course they are institutional seller<\/strong>. Made an offer on one just this morning in fact.<\/p>\n

But\u2026my Vacant House Data Feed<\/a> provides me with access to constantly updated motivated sellers<\/strong> as well (both private and bank owned). It\u2019s a great tool that allows you to search for thousands of vacant homes in any location across the country. Try it out for yourself here 100% risk-free!<\/a><\/p>\n

To figure out which you should be doing \u2013 and maybe it\u2019s a mix of both as well \u2013 let\u2019s look at some of the main differences between these two types of sellers in real estate.<\/p>\n

Private Seller Perks<\/strong><\/p>\n

With private sellers in real estate, the transactions tend to be less complicated<\/em>. There\u2019s no Realtor involved, you can count on a lower earnest money deposit AND you have the ability to come up with creative seller financing on some deals. (That would never<\/em> happen when working with a bank or HUD)<\/p>\n

I could write an entire book on the things I\u2019ve done using creative real estate investing<\/a> with private sellers\u2026<\/p>\n

One time I actually found a mobile home for the seller, added it to the deal and made a profit on it! I\u2019ve also taken cars, antiques and equipment such as tractors. And, I\u2019ve been able to set up zero-interest seller financing numerous times.<\/p>\n

True stories!<\/p>\n

The sky is absolutely the limit when dealing with private motivated sellers vs. institutional sellers. I like to get creative and have fun with it.<\/p>\n

Once you get going and get some experience, you\u2019ll learn this very quickly.<\/p>\n

For the new investor, I always<\/em> say you\u2019re better off with private sellers. It\u2019s a friendlier environment and the best part, in my opinion\u2014small earnest money deposits.<\/p>\n

Institutional Sellers \u2013 Are They Worth It?<\/strong><\/p>\n

First off\u2026you\u2019ll need proof of funds (POF) with every offer.<\/p>\n

Next\u2026you\u2019ll be looking at putting down larger earnest money deposits.<\/p>\n

AND you\u2019ll be working with Realtors. By no means are all Realtors difficult to work with but there are some that can be very discouraging or negative.<\/p>\n

So, when you DO find an investor-friendly agent \u2013 keep \u2018em!<\/p>\n

Realtor Problems<\/strong><\/p>\n

With more than 2 \u00bd decades in the business, I\u2019m way beyond it but sometimes, I hear stories of how some Realtors discourage investors. The investor then has to take time and energy to bounce back from the negativity and I know of some who couldn\u2019t and actually QUIT the business over such an incident.\u00a0 Don\u2019t let this happen to you.<\/p>\n

\"\"<\/a><\/p>\n

I wrote an article about it called: Dream Stealers Stink<\/a>. In it, I go into more detail of what I\u2019m referring to, and you\u2019ll understand why I get a little hot under the collar regarding this topic!<\/p>\n

Make no mistake about it, I love Realtors. They play a huge roll in my business. Unfortunately though, the 80\/20 rule comes into play here just like everything in life.\u00a0 So, again, when you find the ones that are \u201cinvestor friendly\u201d and you surely will, hang on to them!<\/p>\n

Playing by Their Rules<\/strong><\/p>\n

Having said all that, let\u2019s go back to the subject of working with an institutional seller...<\/p>\n

Remember, you\u2019re playing on their court, which means you must play by their rules. <\/em>In order to do that, you must KNOW their rules.<\/p>\n

They\u2019re not going to allow you to \u201cget away\u201d with anything. You MUST do\u00a0double closings<\/a> because they typically forbid contract assignments, whereas with a private motivated seller, you can<\/em> do an assignment.<\/p>\n

In fact, a private seller typically doesn\u2019t care who<\/em> closes, as long as it closes under the terms initially agreed upon.<\/p>\n

The vast majority of banks will rely on their broker to list, negotiate and manage the sale of the house. If you raise what they consider to be red flags, you\u2019re TOAST. (Your offer goes directly into the trash.)<\/p>\n

The good news is that since so many other investors are doing things the wrong way and when you learn how to make offers that make you look like a pro, you\u2019ll be miles ahead of the competition and you\u2019ll make a killing.<\/p>\n

When you\u2019re willing to take the time to learn the ropes, you can make a lot of money working with institutional sellers, but I think it\u2019s always best to learn the basics with private sellers first.<\/p>\n

Remember to give the Vacant House Data Feed<\/a> a try. There\u2019s no easier or faster way to get access to private OR bank owned motivated sellers across the country and you can give it a test-drive 100% risk-free!<\/a><\/p>\n

What\u2019s Your Take?<\/strong><\/p>\n

Have you experienced both types of motivated sellers in real estate? What are your ideas of the pros and cons? And, what about your take on working with Realtors? Your feedback helps others in the industry, so please leave your comments below!<\/p>\n

Regards,<\/p>\n

Cameron Dunlap<\/p>","protected":false},"excerpt":{"rendered":"

The world of real estate investing is full of \u201cdo this\u201d or \u201cdon\u2019t do that\u201d, but do you ever wonder whether you should be doing deals with institutional versus private motivated sellers? After all, it\u2019s always good to have options! People ask me all the time if I focus on deals that are primarily with […]<\/p>\n