Welcome to the third post in our “Featured Tool of the Month” series! Follow us as we break down our software, pixel by pixel. Today’s post focuses on Distressed Seller Lead Generation using Leadpipes.
Last week we covered the value of Absentee Owners, Free & Clear, and High Equity leads.
As we mentioned before, seller leads are vital for business growth. Some of the best deals are made from finding the right seller at the right time.
This week’s post focuses on the other 4 types of seller leads that we provide including Bankruptcy, Tax Lien, Upside Down and Low Equity leads.
These leads include homeowners in financially distressed situations who are highly motivated to sell their properties, oftentimes for considerably lower than market value.
That’s not to say that every single distressed-seller lead will turn into a deal, however, the more leads you have, the better your chances are of finding good deals that will net you a nice profit.
Oh, and since we’re on the topic…
If you’re interested in downloading hundreds of leads without ever having to leave your couch, click here.
Bankruptcy leads are in a distressed financial situation, generally making them very motivated sellers.
A lot of investors shy away from these leads because they aren’t familiar with the bankruptcy process and aren’t sure how they can benefit from working with these leads.
Less competition makes bankruptcy leads great investing opportunities for those willing to take just a little time to understand the bankruptcy process and lingo. Not only are bankruptcy sellers motivated, but often so are the mortgage holders giving investors plenty of room to negotiate great deals.
These are great leads to target because they are early indicators of financial distress. I know countless investors who’ve built their entire business around marketing to delinquent tax liens alone!
If a homeowner cannot pay their local or county taxes, taxing authorities have the right to place a tax lien on their property. After a property has been issued a lien, a tax-lien certificate is produced which can be auctioned off. Those who win the bid on a tax-lien certificate can then collect on the amount owed and have the right to foreclose on the property if the tax lien is not paid within a certain amount of time.
Real estate investors who deal in tax liens have been known to acquire properties for pennies on the dollar using this investing method.
Tax Liens are an extremely valuable lead because they will show up first, even before homeowners have filed for bankruptcy, and long before foreclosure.
Anyone who owes more on their property than its actually worth is considered in an upside down situation. Upside Down leads are common after homeowners take on a second mortgage or additional loans that outweigh the current value of their home.
A majority of the time, property owners in this situation are left with no other option than to try to sell their property to an investor who attempts to negotiate a short sale with the lender.
A short sale is when a real estate investor negotiates with the bank to buy a property for less than what is owed on the existing mortgage.
Not sure why banks agree to this? It’s simple.
Banks are in the business of lending money, not owning property. They can only have so many non-performing assets (such as foreclosures) on their books at one time. A lender will typically make more money when they negotiate a short sale than they would if they foreclosed on a property, so it has become common practice for banks to negotiate these types of deals and cut their losses early on.
When I first started out in real estate investing, short sales were very new. Not many investors were doing them and even fewer banks knew how to handle them. Now short sales are so popular that banks have entire departments dedicated to just negotiating short sale deals. This department is typically called the Loss Mitigation Department.
In real estate, home equity is the difference between what a property is worth and how much is owed on it.
Homeowners with Low-Equity might be in a situation where they have just moved into a new property with a new mortgage. It may also be a situation where the homeowner has taken out home equity lines of credit to pay off other debt and is closing in on the amount of equity available in their property.
Low equity leads may be nearing financial distress and could soon become an upside down lead. Keep an eye on these as they may be willing to sell to get rid of the headache of owning the property.
If you’re looking for motivated sellers, targeting these lead-types can create great investing opportunities. Dealing with motivated sellers creates the right set of circumstances where you can negotiate mediocre deals into killer deals.
Not every lead that comes your way is going to be a great deal, but having more leads to work with will always work towards your advantage.
Simply select the lead type that you’re targeting and filter your search by state, city, county, loan, tax information, and more.
Go ahead and try it out for free here.
I’d love to hear what you think. Leave me a comment below!
For next week’s post I’ll be covering the value of Private Lender leads. Be sure to check it out!