Here’s an Often Over-Looked Source of Big ProfitsReading Time: 4 minutes
Hello again fellow investor!
Buying properties from out-of-state owners is what I consider the most overlooked method for getting great deals. Why? Because there’s little competition from other investors and the sellers are often highly motivated.
I recently discussed the technique of contacting out-of-state owners with several of my closest investing friends. Those who weren’t pursuing this source of deals said something like, “Yeah, I need to be doing that.” And the ones who were doing it absolutely LOVE it!
The worst comment that I heard about this method was as follows … “I tried mailing to out-of-town owners. I got a deal from it, but it seemed like the sellers I talked to were getting a letter about once a month from another investor or Realtor. So the competition was a little stiff.”
Folks, I disagree with the stiff competition comment above. Compare that to contacting those on the pre-foreclosure list where sellers are getting 10-30 letters a DAY. So, mailing an EFFECTIVE letter (which should appear personal and genuine) to out-of-state owners has the potential to give you a much greater return on your time and money.
Notice that I’m referencing out-of-STATE owners, not just absentee owners. An absentee owner could live down the street or across town. So their level of motivation is likely to be lower. They can more easily rent, sell, or take care of the property. An out-of-stater, on the other hand, is too far away to deal with the property.
Out-of-state owners have one or more of these problems: They moved, and their old house is sitting vacant, so they’re paying for a house that they’re not using. And on top of that, they’re paying for their new house, so they have 2 mortgage payments. Or, they’re trying to rent or sell it but are having no luck. Or, they have a tenant in there that they can’t collect rent from. Or they have a property manager that is not taking care of it. After all, the manager knows that this owner is out-of-state and can’t see the day-to-day property management problems. The list of potential problems goes on.
There are several ways to get this list of out-of-state owners. These ways range from free to $400 or more. You decide how much you want to pay. But the more you pay, the less work you have to do. Here’s what I mean…
For free, you can go to your county appraisal district’s website and pull up property records one at a time to see if the owner lives out of state. Free? Yes. Unbelievably time consuming? Big yes. I don’t advise doing this. There are better things you can do with your time.
A better way is to request a list from the appraisal district. Just call them up and say that you need a listing of their single family houses on a CD. And you need the list to include owner names, mailing addresses, and property addresses. Almost all counties make you write a letter requesting the list. Then they’ll mail you the CD. And they WILL charge you for it. I called several counties and got prices ranging from $20 to $400.
Once you get the CD, you’ll open up the Excel file that contains the list. Then, you’ll sort the Mailing Address State field. Then, you’ll delete those that don’t live in the state where you’re looking to buy. And you’re left with out-of-state owners. But you’re not done yet…
There’s a VERY good chance that 20% to 30% of the mailing addresses are no good. Appraisal districts just aren’t good at keeping that info up-to-date. So, if you want to get the current address for those people, you’ll need to “clean your list”. You can do this by paying a “List Cleaning” company $250 to $450 per thousand names. I don’t have to tell you that this adds up fast.
Another good way to get this info is by calling a “List Broker”. These folks get info from all different sources, compile it, cross-reference it, etc., and come up with a list of out-of-state homeowners. The best list broker for real estate that I’m aware of is RealQuest.com. Be sure to check it out.
That’s all for now. If you’re not already on the out-of-state owner bandwagon, I encourage you to jump on. Big profits await those who do!
Until next time, happy (and profitable) investing!
Real Estate Investor and Founder of MyHouseDeals.com
P.S. If you haven’t done so yet, be sure to capitalize on the dozens of motivated sellers and wholesale deals that are already at your fingertips. Many of these sellers are out-of-state owners. To access the list in your area, start your free trial at www.myhousedeals.com/freetrial.