I’m guessing here from your rich comment that you don’t have alot of money to put down. That is where you will find many properties need a large down in order to cashflow. You have the right idea with your first question:
It seems to me that the two main routes are to find a run-down property and fix it up, or to find a motivated seller. On the right track here…
As far as fixing it up, I am not that confident in my ability to estimate value and repairs. Can I hire someone to do it for me? Yep. Join your REI club, talk to other investors, and get some good leads. If you find a good property inspector, you can get a ballpark by giving his report to a contactor. (this isn’t foolproof, but its a start)…
And if not, how can I develop those abilities?. continued from above…get involved actually doing it.
As far as locating motivated sellers, I have a hard time believing I can find one that will sell for 70% of FMV. To me this seems next to impossible. Am I wrong? Nope not impossible, but not easy either. It takes work & time…but they are out there.
And if it is possible, how much money am I going to have to spend on marketing for it to be effective? I’m trying to get into this because I want to get rich, not because I am already rich. This is hard to say, depending on “who” your trying to reach, and your what your sending. Many successful people are always tweaking trying to get better results. Again…can’t stress it enough…join a local REI club…great source of leads. If another investor finds a deal, but it doesn’t match his plan he may call and offer it to you. Likewise, you rehab question…partner with a rehabber to fix up your rentals. Cost for this…FREE (other than dues for club)
Drive-by’s: locate a beat up/vacant property, use public records / tax info etc…to find owner. Call / letter / post card. (mostly time, some small $)
Direct Mail: Get targeted list, create letter/postcard, mail…mail…mail. This one is a little more expensive, you may need to buy a list or build your own from some source, and then create a plan on how often to mail to your list. The trick here is a good list, and keep mailing over and over.
I’m doing all of them…but by far my best leads have come from networking with other investors. Good Luck