How to find and buy abandoned houses – Investors guide
Abandoned properties can be a gold vein for some real estate investors.
And most likely, you have a few in your neighborhood.
If you’re a local investor (or even a virtual wholesaler) it doesn’t hurt to:
- Identify these houses
- Skip trace
- Market to them
- Make an offer to buy
And if you’re on the go, running errands and sorts… keep your eye out for these.
So in this article, we’ll dive into how to FIND them, market to them, and reach out to the owners.
Let’s dive in:
Driving for dollars plan to find abandoned houses.
Ever heard of the phrase “driving for dollars?”
If you haven’t, it’s high time you did.
In the world of real estate investing, this phrase describes an action that’s both straightforward and effective. You literally drive around neighborhoods to look for properties showing signs of neglect or abandonment.
It’s old school, sure, but you’d be amazed at how many promising leads you can find with a keen eye and a full tank of gas.
Step 1: Prep Your Vehicle and Supplies
Before you hit the road, make sure your vehicle is in tip-top shape. No one wants to be stranded in an unfamiliar neighborhood. While you’re at it, grab a notepad, pen, camera or smartphone (for photos), and a GPS or map. Old school meets new school.
Step 2: Choose Your Hunting Grounds
Not all neighborhoods are created equal. Start by targeting areas with a good mix of older homes and more recent foreclosures. Historically, these places tend to have a higher percentage of neglected or abandoned properties.
Step 3: Train Your Eye
What are you looking for? Houses with overgrown lawns, stuffed mailboxes, broken windows, or boarded-up doors are all good indicators. Essentially, you’re looking for signs that the homeowner isn’t… well, home.
Step 4: Take Detailed Notes
Whenever you spot a potential lead, jot down the address and any observations about the property’s condition. If possible, snap a few photos. Remember, these notes will help you later when reaching out to owners or assessing the property’s value.
Step 5: Use Deal Machine to Your Advantage
Ah, the wonders of technology. Deal Machine is an app designed for real estate investors just like you. With it, you can instantly get property details, owner information, and even send a postcard to the homeowner right from your phone. It streamlines the process, cutting down on the time you’d normally spend researching and reaching out. If you find a potentially abandoned property, simply input the address into Deal Machine. From there, you can market directly to the owner with a personalized touch.
Ok… so now you have an address…
You need property and owner information.
That’s our next step:
Finding the Owner of the Abandoned House
Finding an abandoned house is like spotting an iceberg. You’re only seeing the tip, and there’s a whole lot more lurking beneath the surface. And just like with an iceberg, the real value (or challenge, depending on how you look at it) isn’t in what you can see, but in what you can’t. In the world of real estate investing, that elusive “beneath the surface” element is often the property owner.
You’ve identified the property with tools like the Deal Machine app, which is fantastic. It’s like having a treasure map. But to really strike gold, you need to connect with the property owner. And herein lies the challenge.
A Common Misconception:
One might think, “Well, if I have the property address, then I can just reach out to the owner at that address, right?” If it’s an abandoned house, there’s a good chance that sending mail to that address will be about as effective as sending a message in a bottle out to sea. Even if the title lists the property address as the mailing address, that doesn’t mean the owner is picking up mail there.
Enter Skip Tracing:
So, what’s skip tracing? Think of it as detective work for the digital age. Skip tracing is a method used to locate someone who isn’t easy to find, often by gathering and analyzing a vast amount of data to pinpoint their current whereabouts. It’s like connecting the dots, but the dots are bits of information scattered all over the place.
Here’s the cool thing: while skip tracing used to be the domain of private investigators with trench coats and magnifying glasses, technology has democratized the process. There are online services and platforms designed specifically to help you find people.
Pulling a list of abandoned houses
You might not want to drive 4 dollars or maybe you want to 10x your actions…
Well there are tools that help you pull that list.
Ever wished for a magic wand that could instantly give you a list of vacant houses? Propstream might just be the next best thing. This platform is a boon for real estate investors and wholesalers, designed to give you a leg up in the game.
You can literally pull that list of abandoned houses for you. It’s a low monthly cost.
Then when you have that list you’ll have to do something with that.
Advanced Tip: Use the tool “ReiSift” that helps you not only clean the list (because there are many people who own multiple properties and you don’t want to send to duplicates)… but also SCORE leads so that you can first send to the higher more motivated leads that are more likely to sell.
Mailing Abandoned Houses
Mailing, in this digital age? Absolutely. And when it comes to the world of real estate investing, it’s more relevant than ever. While the good old-fashioned letter might seem a bit vintage, it has the potential to create a personal touch, which is often lacking in our digital communications.
The Address Conundrum:
As we touched upon in the previous section, mailing an abandoned house directly isn’t the smartest move. Why? It’s a bit like trying to call someone on a phone they’ve left at home. The chances of reaching them are, well, pretty slim.
You see, the property address, if it’s listed as the mailing address, could very well be a dead end. The real person, the property owner, might be somewhere else entirely. It’s like having a puzzle where you’re unsure where the pieces fit.
After the Skip Trace:
But ah, here’s where the magic of skip tracing steps in. After you’ve gathered the information on the property owner, you’re no longer in the dark. You have a new address, a new piece of the puzzle, and that’s where your letter should go.
The Art of the Handwritten Letter:
In an era of emails and instant messaging, a handwritten letter can be as refreshing as a cool breeze on a hot day. It speaks volumes. It says, “Hey, I took the time to sit down, put pen to paper, and write this just for you.”
So, what should the letter say? Here’s a tip: Keep it simple, genuine, and to the point.
– Begin by introducing yourself and mentioning how you came across the property.
– Express your genuine interest in purchasing the property.
– Emphasize that you’re willing to make a fair offer.
– Maybe share a brief story or two about how you’ve helped other homeowners in similar situations.
– And, of course, provide your contact information and a promise to follow up.
The Power of Persistence:
Sending just one letter might not always yield results. Sometimes, it’s about consistency and patience. If you don’t get a response, consider sending a follow-up letter or even making a follow-up call. Remember, many homeowners with vacant properties might be dealing with a myriad of issues, and selling their property might not be their top priority. Your letter could serve as a solution they hadn’t considered.
Advanced tip: Get a simple and fast website from Investor Carrot (here’s our Carrot review) and place it on your mailers. You’ll instantly boost your credibility when they google you. Here’s our list of other website builders for investors
Cold Call Owners of Abandoned properties
Cold calling. Yes, it’s as chilly as it sounds. But, if done right, it can be the warm handshake that seals a deal. Though the thought of reaching out to a stranger might feel intimidating, remember this: Every call is an opportunity to solve a problem. You’re not just looking for a property; you’re offering a solution.
So, you’ve done your homework. Skip tracing led you to a list of potential gold mines, and now it’s time to pick up the phone. But, what do you say? How do you say it? Let’s break it down.
Preparation is Key:
Before you even think of dialing that number, take a deep breath. Understand that rejection is part of the process. It’s not personal. And with each call, you get better.
Have your notes ready. This includes information about the property, any letters you’ve sent, and key talking points you want to hit.
The Cold Call Script:
Remember, the aim isn’t just to ask if they’re selling. It’s about building a connection, even if it’s brief.
You: “Hi [Owner’s Name], my name is [Your Name]. I hope I’m not catching you at a bad time. I recently sent you a letter regarding your property at [Property Address]. Did you happen to receive it?”
Owner: “Yes, I did” / “No, I didn’t.”
You: “No worries! I’m reaching out because I have a genuine interest in properties like yours and was wondering if you’ve considered selling it?”
Owner: “I haven’t thought about it” / “Maybe, why?”
You: “I understand. Selling a property, especially one that’s been vacant or abandoned, can be a daunting task. My goal is to make the process as seamless as possible for homeowners like yourself. If you ever decide to sell, or even just want to discuss your options, I’d love to help.”
Owner: “[Their response]”
You: “Thank you for considering, [Owner’s Name]. Whether now or in the future, know that I’m here to assist in any way. I’ll leave my contact details with you. Have a great day!
Cold calling is about communication. It’s a dance where you lead with empathy, follow with understanding, and aim to end with mutual interest. Whether they’re selling or not, leaving a positive impression ensures they’ll remember you when they’re ready to make a move.
They’ve Responded, Now What?
Oh, the thrill of a ping! It’s the sound of opportunity, but also the moment where things get real. So, an owner responded. That’s half the battle. Now, let’s get to the juicy part — navigating the path from “Hello” to “Sold.”
1. Slide Them into Your CRM:
Customer Relationship Management (CRM) tools aren’t just fancy databases; they’re the lifeblood of any serious real estate professional. By saving potential sellers into your CRM, you’re not just organizing your contacts; you’re setting the stage for a relationship.
When inputting details, make it comprehensive:
– Full name and contact details.
– Property details, conditions, and any unique features.
– Notes from your conversation – pain points, motivations, timelines.
Here’s a small list from our top ten list of CRMs for investors:
2. The Follow-Up Dance:
Consistency is your best friend. Just because someone expressed interest doesn’t mean they’re ready to jump in. It’s your job to nurture that interest. Set reminders to check in periodically. It could be once a week or once a month, depending on their urgency. During these check-ins:
– Address any concerns or questions they might have.
– Update them about the market conditions.
– Reiterate your interest and remind them of the solutions you provide.
3. Crafting the Perfect Offer:
Making an offer isn’t just about quoting a price. It’s about understanding the seller’s needs and crafting a proposal that addresses them. Ensure you’ve done your homework:
– Analyze comparable sales in the area.
– Assess the property’s condition and estimate repair costs.
– Factor in holding costs, desired profit margins, and other variables.
Then, present the offer transparently, detailing your rationale. This builds trust and makes negotiations smoother.
4. Persistence with Tact:
Even after presenting your offer, the deal isn’t sealed. Some homeowners might need time to mull things over. And that’s okay. Continue your follow-ups, blending different mediums:
– A handwritten note expressing your continued interest.
– Casual text check-ins.
– Periodic calls, not too frequent to be bothersome, but enough to show genuine interest.
However, remember the thin line between persistence and annoyance. If they explicitly say they’re not interested, respect their decision. There’s plenty of fish in the sea, or in this case, properties in the neighborhood.
In conclusion, while the initial response might feel like the finish line, it’s merely a milestone. The real challenge lies in cultivating that interest, building rapport, and steering the conversation towards a mutually beneficial conclusion. In the game of real estate, patience, persistence, and a sprinkle of charm are the ingredients to success.