So i’ve been reading now for weeks and I’m a banker as well and I’m very curious as to how must of you find your good deals. Do you put out signs on street corners? Do you go to the county court house and look at the forclosure notices? Do you have a real estate agent you can trust that sends you leads?
I have found that this is going to be ruff for me as I work full time and go to school part time. If you can give any advice on techniques that work to locate properties efficently please advise!
Look every where. You never know where the deal is. If there was a good formula of how to do it, anybody could do it like a paint by number.
Let tradesmen know that you are looking. My carpet cleaner is always hearing about good deals, because he cleans nasty carpets for fed-up landlords and he cleans carpets in houses that are going in the market.
Join your local REIA and make friends with the SUCCESSFUL investors in your area. You will be surprised how many great deals you’ll find if you know the right people.
Be VERY careful when using REALTORS. In my experience most of “the deals” realtors get are dogs. If they were deals they would never make it to the MLS. I find all my properties through direct advertising.
I get them BEFORE anyone else knows they’re even for sale. It’s not a fast way to buy property, but it is VERY profitable.
I’m not saying you can NEVER get a deal from a realtor, but in MY experience they have a conflict before they even get started. Case in point…
I just purchased a 4 bed, 2 bath home directly from a private owner. The home needed about $9000 worth of work. I purchased it for $110,000. Comps for the neighborhood are $220K to $250K. Now if the owner HAD called a realtor, that realtor would have given the owner a selling price based on comps minus needed repairs for a final AS IS selling number of around $200K. The realtor does that because they want to get that seller THE MOST they can for any home, their commission is structured to encourage this. The more they sell it for the more they make. Everyone wins! The problem for you is even with a $175,000 blowout price there is NO money in the property for you.
If it was as easy as calling realtors, no one would have a job!
I wholesale-Rehab and flip. I get weekly NOD-NOT-REO from First American Title Solutions for my 2 local Counties. I target subject properties based upon my own criteria as well as my investors criteria.
After finding pre foreclosures that could work, I run a property profile, or preliminary title report. If I need to look at several, I will go to the recorders office as this is less expensive.
Next! I take my toddler daughter, or borrow a friends puppy! Thats right!
I go on a Saturday around 10:30-11:30 and walk up and down the street of the subject property. Usually quite a few neighbors of the subject defaulting owners will be outside. My charming daughter and or the adorable puppy attracts a lot of attention and breaks the ice for sure! I tell them I am thinking of moving to the neighborhood.
9 times out of 10, I leave with a TON of information about the defaulting neighbor. Often I am introduced in a non-threatening manner, and quite often I am introduced to a relative, which is even better. I am now, in like flynn!
The rest is in the art of understanding people, empathy, listening and selling an idea in a non threatening manner.
One occasion I actually got in the foreclosing owners house with the puppy and my daughter, locked up a contract, and had a nice supper with the family. I helped them move and rented an apartment for them for 3 months! Assigned the contract with a local investor buddy for 20k the next morning!
Now, lately due to the sub-prime and ARV meltdown, there has been quite a bit of inventory on MLS that I have been able to negotiate down to numbers needed to wholesale to my less choosy investors.
We have found deals on the MLS, of course we had to make them deals by offering much lower than list price. Having a wife that is an agent helps too because we know what the house REALLY comps at. It’s going to get fun this next year when we have hundreds of REOs a month to choose from!! My two cents: Buy at a HUGE HUGE HUGE discount!!!
I’ve had pretty good luck on the MLS too, with offering way less on homes that have been on the market for a long time. I’ve also worked with the same realtor long enough that she’ll call me if something comes into her office I might be interested in before it gets listed.
If you are in an area that has suffered from the Real Estate Bublle popping you can now or will shortly find some great REO deals on the MLS. Certain banks are now getting the message that the real estate boom is over. Also year end is approaching and they want to get some of these properties off the books. Check your MLS for bank owned property and make some low offers. Remember if you are not embarrased with your offer it was not low enough.
I am a motivated seller, experienced investor, looking to sell two properties, with low down payments and positive cash flow. I’m trying to figure out where to advertise them to investors, but I dont think it is allowed on these forums.
Attending Your Local REIA to network with and see what other active investors are doing
Putting Up Bandit Signs
Sending Direct Mail - to out of state home owners
Calling FRBOs (For Rent by Owner) ads/signs
Calling FSBOs (For Sale by Owner)
Contacting Bird-dogs
Advertising on the web or in the newspapers
Plastering Your “I Buy Houses” Business Cards EVERYWHERE
Telling at least 10 new people every single day that you’re looking to buy houses…postal workers, exterminators, gas/electric residential meter readers, grocery store clerks, gas station attendants, everyone…
Having a Realtor check the MLS for expired listings or keywords - DOM, vacant, estate, preforeclosure, must sell, fixer-upper, closing help, moving, relocated, divorce, etc…
In terms of finding properties using the MLS, it is true that a realtors job is to get an owner as much money as possible. And in my experience it is rare that an owner will “advertise” that they are willing to sell at 60% or less.
But again in my experience, it is also true that the MLS is a great way to find deals because you already found an owner who wants to sell. The “key” is still to find the owners who NEED to sell (no matter what).
So, what’s the big secret?
Investors who make offers…get deals.
Search for certain keywords - DOM (days on market), “estate sale”, “must sell”, “vacant”, “needs work”, “fixer-upper”, “tenant occupied”, “make offer”, “relocating”, “military”, etc.
It’s a strategy that takes LOTS of offers! And I am not saying this is the way everyone should do this, it is simply what has worked for me in my experience.
I use real estate agents. I find the real estate agents that I find at my local real estate investors club meetings. The typical agent that you see driving around in a Lexus wearing a gold jacket on has no idea how a house makes money. Because of that they have no idea if a house is a good deal or not. The agents that are advertising at the local real estate investor’s club usually have good deals.
The average real estate agent that you find wearing the balloon name tag on their dress doesn’t believe in real estate and they usually don’t own any. The reason they don’t believe in it is the only exposure they have to it is somebody coming to them in trouble because they are losing their shirt begging them to get it sold. They have no idea how to do real estate right. YOU have to know how to do it and evaluate every deal they bring to you to make sure it is a money maker.
Its all about building the right relationships. I mean I am living in Australia and currently own 3 properties which I am renting between San Antonio and the Rio Grande Valley.
I have built relationships with the right people. This year I have done 4 joint ventures also.
Its pretty simple concept that works. There are to many people out there ripping people off.
With the JV model, they dont get paid until the deal is done. So therefore they have an interest in the deal.
Property management I find to be a real headache in the U.S. Its hard to find someone who is actually an investor themselves. You need to work with people who are actually doing it with there own money.