How to Find and Approach Private Lenders
By Christina El Moussa
The first part of all good flips is establishing a good rapport with the seller. When you get into flipping houses, you might find the perfect property, but you can mess it up and ruin your chances of getting a great deal if you don’t know how to talk to the seller.
Remember, people who are in the position to short sell their homes or to otherwise sell them below market value aren’t doing it because they’re in a good place financially. Honestly, neglecting the seller’s position and feelings is one of the biggest flipping mistakes you can make. If you want a good deal on a house you really need to know how to talk to the homeowner and give them a positive feeling about the deal.
“Did I Catch You at a Bad Time?”
First of all, whenever you call a potential seller, you want to make sure that you’re not interrupting something important. Don’t call at dinnertime, and don’t call late in the evening, either. In general, save calls about purchasing their property for business hours.
If you miss them, leave a polite message letting them know who you are and why you’re calling, as well as contact information and an invitation to call back at their convenience. If you catch them, though, be sure to ask if you’ve gotten them at a convenient time to talk about their property.
Ask Them If They Want to Sell
Once you have your potential seller on the phone, don’t jump right into a pitch to buy the property from them. First ask if they want to sell it. If they are not motivated to sell, then you know your answer and you can move on to your next lead. If they do want to sell the property, it’s time to ask a few more questions about their situation and motivation.
Ask Why They Want to Sell
This can be touchy, so be very sensitive when asking about motivation. If they’re selling because they can’t afford the mortgage and they’re facing bankruptcy, you can help them by saying something like, “Well, honestly, I would like to buy your property and help you out from under that burden…” This opens the conversation up to discuss some details about the house that could affect the purchase price and whether or not it’s a good flip.
Be Understanding
After you’ve assured them that you want to help them and that this deal could be beneficial to them, ask them about any repairs the house might need. I recommend starting this gently and respectfully with an opener like, “I do need to know a few things about the house before we can move forward and help you out. Would you mind telling me about any repairs or maintenance that it needs?” As they tell you, don’t let your tone turn negative or judgmental. Simply confirm that you understand what the property needs.
Ask What They Would Like to Get for the Property
Finally, ask them, “Without any renovations, if you were to take cash for the house right away, what price would you need to get for it?” This focuses on their needs, not on the fact that you’re going to fix and flip their house for a potentially large profit.
Keep your seller’s feelings in mind as you navigate through your questions about the house, and you’ll not only make them feel comfortable and relieved, but you’ll also get a lot of answers to important questions you need to ask. And you’ll avoid two of the biggest flipping mistakes: offending the seller and getting too little information on a property. Flipping is a good way to help everyone out, all at once, and if you follow these tips, you’ll show your seller how helpful it can be for them too!
About the author
Tarek and Christina El Moussa have over a decade of professional real estate experience and have been featured in national print publications, online media outlets, and HGTV’s Flip or Flop. Christina is known for her exceptional design and aesthetic talent.
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