How To Find Super Desperate People To Sell You For Cheap

GoodPlace.my Melanie Brown

Our last feature on a recent visitor to GoodPlaceHQ (read it here if you have missed it) has received rather skeptical responses from our readers (although there was also a fair number who emailed in wanting to get in touch with her). I gave Melanie a call this morning to share with her the comments that I have received (you can read some of them at the bottom of that article), and here are her responses:-

  • Is she setting up a property club? “No, I’m not a property club. Each buyer gets dealt with separately. I don’t poll capital either.”
  • Is she a buyer’s agent? “No, I’m not an agent. In fact, I work with agencies frequently to get deals done.”
  • Has she accounted for RPGT, and how much does that cut into her margins? “Of course. I have run the numbers, and they work out fine. That’s all I’m telling you.”
  • Who are her customers? “My existing buyers. That’s just a starting point, and in six months I’ll be recruiting local buyers who won’t be encumbered by foreigner ownership restrictions.”

“Here’s another question for you, and it comes from me,” I told her. “I want to know your secret sauce. I trust your numbers and your track record. But you obviously have an edge, and I want to know what it is.

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She laughed, and said, “I’ll write you an email.”

DISCLAIMER: I do not necessarily condone what Melanie does or claims to do. If you decide to use some or all of Melanie’s strategies, do so at your own risk.

Melanie’s “Edge” – Finding Desperate People You Can Lowball (!)

(by Melanie, with some minor editing for brevity and emphasis added by Khai Yin)

Remember that I had told you that my business basically revolved around one principle: that finding a buyer for a home is harder than finding a home for a buyer. Indeed, the battle is more than half-won when I have got a ready buyer. And of course, it gets even better when the buyer is coming back repeatedly to me after a few successful deals. The importance of having a good, growing database of customers can never be overstated.

Buyers come to me because I can find them deals. My competitive advantage is my ability to find overlooked, undervalued real estate. And I won’t even mask my words here. I am skilled at finding desperate sellers who I can lowball. Your readers may take offense at my choice of words, but this is essentially what I do. I find people who I can LOWBALL.

I am not here to talk about ethics, so I won’t attempt to debate anyone about the morality of the whole scheme. I am just playing the role of a matchmaker between the buyer and the seller. Indeed, it’s quite similar to what you’re doing with the DealMatcher, although I am unclear about your business model.

Now your readers will want to know where I find these people who are willing to sell me their real estate at super cheap prices. I’ve got more aces up my sleeve than David Blaine, but I don’t mind sharing a couple of my techniques with your readers. There will always be more houses than I can buy, and so I don’t mind letting my methods known to your readers who may even be my competitors someday. So, here we go. ๐Ÿ™‚

Method #1: Mine Expired Listings

I remembered reading your article on exploiting property portals on finding boom areas (it’s here – KY), and I thought that your methods were quite similar to what I use in order to find acquisition targets. For some reason I don’t understand, property portals like to keep expired listings (Portals like to boast that they have got gazillions of listings – new or dead notwithstanding. – KY). In *PORTAL NAME REMOVED* for example, there are tens of thousands of archived listings which you can mine for gold! If you know how to hack Google, you’ll know how to get this info. ๐Ÿ™‚

Once I’ve gotten hold of a list of expired listings, I’ll start mining for gold. Typically I will narrow down the list to those which have expired between 12-18 months before (that’s the sweet spot). Then, by comparing with the database of fair market prices that I have (using JPPH data – thank you for your guide!), I’ll be narrowing down even further to get a list of expired listings AT market value (I won’t consider buying overpriced stock at all). I’ll then get in touch to see if the sellers (or the seller agents) are willing to sell 15-20% BELOW their previous asking prices or not.

Now why do I target expired listings with prices at market value? Simple! If the seller had problems selling their units AT market value 12-18 months ago then they would be MORE RECEPTIVE to the idea of selling them BELOW market value NOW. These are people who I can lowball. I like to have the upper hand in any deal. And that’s why I like desperate sellers, and this is how I find them.

During our meeting last week you asked me if I would be worried if you’d expose what I do to your blog readers. Honestly, I am not too concerned about copycats. I am ahead in this game, you see. Anyone tries to copy my method would probably give up even before he reaches the second page of Google! Don’t believe me? Ask your blog readers to try, and then let me know. ๐Ÿ™‚

So as you can see, my secret sauce is NOT my method. I have a way to automate the entire process which makes it absolutely painless for me to look for RESPONSIVE sellers who would sell me at low, low prices. I push this magic button on my desktop and my inbox gets flooded with good offers in 10-12 hours. And you can be sure as hell that I am not going to share that “magic button” with you!

Of course, this is only one of the methods that I use to mine for desperate sellers. I have a couple more ways too… and I can let you know what else I do if your blog readers want to hear more. ๐Ÿ™‚

Khai Yin’s Take

Melanie’s method on finding desperate sellers is nothing new – in fact I have written a guide on this a couple of months ago (see this if you have missed it – scroll down to Bonus Tip #4). I personally know a couple of people who make a good living “preying” on seller desperation, but this is the first time that I am seeing someone doing it on a large scale.

Melanie didn’t share with me her “magic button”, but being a geek myself I can imagine how I would automate the entire process from mining Google to sending out offers via email. If I am going to do it, then this is the approach that I will take (warning – some geeky jargon ahead):-

  1. Build up a database of “fair” market prices for properties. This can be as elementary as piping data from JPPH and computing the average last three transaction prices.
  2. Scrape Google using the search queries above and save the links in a flat text file.
  3. Follow each link in (2) and scrape the respective listings at the property portal. Save the (1) property name, (2) asking price, (3) unit size, (4) agent or seller email into the database or a CSV file.
  4. Compare the databases you have built in (1) and (3) to cull out a list of properties which fit the price criteria (i.e. within the +/-5% range of fair market value).
  5. Send out offers via email for each of the listings culled out in (4) above.

As you can see, all five steps above can be automated without the need of manual intervention. However, unless you have got a team of geeks to hack this up for you (you need HACKERS, not just ‘programmers’ – here’s the difference) and kick butt infrastructure to run your code (good luck scraping 314,000 search results from Google without getting your IP banned), you are likely to fail in a rather spectacular fashion.

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And to top it all up, here’s something else that you must bear in mind before you attempt something like this…

WARNING: Web scraping violates the terms of service of most websites, and property portals are known to come down hard on scrapers on grounds of “trespassing” and copyright (see this). If you worry about getting lawsuit threats from well heeled, Mafia-like organizations (that’s what property portals are like!) then don’t do it.

On the other hand, if you’re unfazed with the sheer ballsiness of doing something like this and you don’t give a flying feck about lawsuits, then I salute you and welcome you to the whimsical,ย  irrationally exuberant world of entrepreneurship. ๐Ÿ™‚

About Khai Yin

When I am not writing for GoodPlace.my and helping my readers find properties though the DealMatcher service, I spend time doting on my three kids: Wenyi, Qinyi and Eian. My personal stuff, some published essays and contact details can be found at khaiyin.com

Comments

  1. Morning KY,

    So she’s basically getting below below market deals and then “selling” it at below market price. Easier said then done but anyway the main question is about the contracts – she’s obviously not signing the SPA but assigning the contact to the buyer for a fee. Is this allowed in Malaysia?

    Thanks,

    Rui

    • Just a guess – she might be tying up with an agency which executes the deals, or charging an advertising fee for her services.

      I’m hopping on a call with her tomorrow morning. Will probably write a follow up post next week.

  2. What she does is what is known as “wholesaling” here in the US. It is a very old and saturated technique to real estate investing here. You simply put a property under contract to purchase for a significant discount and then sell that contract to a cash buyer for a fee.

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