How to Get To the Deal With Direct To Seller Investing.

Ask anyone that’s been in the game a while or read any of the plethora of books on the subject of finding great deals and they will all agree on the dame thing, the best deals are made off market going direct to seller. Great deals are made when the seller doesn’t even know they are selling yet! Off market direct to seller deals are good for a number of reasons; they generally cut out commissions from broker and agents which account for 3-10% cost increases, they typically come in at under market value and typically have a great value add potential through deferred maintenance, and there is often less competition since the property is not listed in the MLS and thus the hundreds of listing sites such as Zillow, Trulia and Loopnet are not advertising them. Everyone agrees this is the best way to ensure your money is made at the closing table.

By far these are the number one questions I get from new investors and those trying to get into the business. How do you get to these deals, what’s the secret? How do I find the Seller? Should I buy a list? In my last article I covered driving for dollars, how to find potential properties. Now lets take it a step further and find out how to turn that potential property into an actionable lead and get in contact with the property owner.

Finding the Owner

The first step is to uncover who owns the property, this sounds simple but can be complicated to ascertain, many investors use LLC’s to hold their properties so where do we start. After driving for dollars we found 1614 Harmon St. in Norfolk Virginia. The property meets our criteria and we want to reach out to the owner about potentially purchasing the property. Let’s find out who owns it.

Step one who owns the property. Most municipalities have an online property data base, a quick google search of “Norfolk VA property records” reveals Norfolk is no different. A quick search of the address and we are rolling.

Here we see a great deal of information regarding the property, what we are after is the owner name and the mailing address. If the property is held by an individual you will see the name here, this is more often the case with residential units, and however with investment properties more often than not you will get an LLC or corporation name. The Mailing address is where they are sending the tax bill, in some cases this is the owner’s home address, here however as is usually the case it’s something else, this could be the property managers address or the attorneys address.

So far we know the property is held by Bel Aire Investments, L.L.C., while this gets us one step further it does not reveal much in the case of who owns the property. The next step is to find out who owns the LLC, for that we have a couple of choices you can simply google the name of the LLC and weed through the results or go direct to the source.

As with property data, most states keep an online database of business entities, LLC’s, partnerships and corporations to name a few types. And again VA is no different so we visit the state corporation commission’s website and go to work.

Now we are getting somewhere, here we have another piece of the puzzle RA or registered agent. All business entities have what’s called a RA. This is the individual on file that serves as the point of contact for an organization for the state. In this case the RA is a member of the company, in some cases it will be an attorney hired to be the RA. The RA address, in this case it is the owners address in the case of an attorney RA this would be there office address. Finally we have the principle Office address, this is what we ae after this address more often than not is the owners address, in a case where the RA is an attorney the principal office address is the one you want to chase down.

We can note here that the RA address is a good point of contact, if this is an attorney’s office they must forward all correspondence received on behalf of the entity must be forwarded to the owner unless they have specific direction not to.

For the sake of this article we are going to assume we do not have the owners name at this point and that the RA was listed as an attorney.

Our next step is to find out who owns the principal office address, this is simple in most cases and you will just repeat the process above in the property address database, in this case the result of that search would yield Danielle Rxxxxx Xxxxxx.

We now have a name and an address Danielle Rxxxxx Xxxxxx, 9590 Bay point. We can start a direct mail campaign with this info and be relatively certain we reach our mark. You can now take it a step further and skip trace with this information. Before you spend money and time with skip tracing I recommend you plug in what you have to google. In this case we are able to get all the information we need for free.

We now have all the information we need to go direct to the seller without having to pay a dime for any leads, or skip trace or commission.

I want to add a word about lists here, you can absolutely buy a list they are available on the internet from no fewer than 1000 sites, in fact a google search of “direct to seller list” returns About 497,000,000 results. I caution you to do your research before you give any of these companies your hard earned money. To illustrate just yesterday I received a call from a “wholesaler” answering one of our Craigslist ad’s. He proceeded to give me his pitch, it was clear he was reading it from a script, and then he asked me a few questions regarding what we were looking for. The questions he asked were all related to how much we wanted to pay and how we arrived at value, sadly he did not actually understand what he was asking or why. He did not inquire about the type of property we were looking for. At this point he said he had some properties we may be interested in, he then asked me to hold while he consulted his “list”. After a few moments of listening to shuffling papers in the background, he returned and began rattling off numbers and locations of apartment complexes in the area, after each one I would answer “is that XXXX (name of complex) in XXXX (name of neighborhood) each and every time he said yes. He then jokingly said we must be working off the same list, I laughed and informed him that all three of the properties he had were on the market one had even gone under contract the prior week.

I highlight the above interaction not to poke fun but to illustrate that you have to exercise some due diligence before you invest money with these list sources, you may be paying good money for LoopNet’s list.

What would you like to see next?