Is there a book specifically about locating deals?
Yes, but I’m still in the process of writing it. I hope to finish it early next year and get out of the REI business altogether. ;D
Seriously, each person’s goals and circumstances are different and, likewise, so are their paths. There are numerous ways to find houses, so we’ll just say “Find Property” as step #1. You need to quickly ascertain whether the property is “good” or “bad”. This is a HUGE step that many don’t do correctly as it depends on a lot of factors. So, in your scheme of things, step #2 is actually step #2, #3, #4, and #5.
- Create a preset list of YOUR criteria.
This includes a LOT of things like property characteristics (age, size, type), level of repair work needed (major rehab, heavy cosmetic rehab, light rehab, no rehab), your time required, your financial position, etc.
- Locate Properties
Depending on your criteria (and then some), you may drive for dollars, network, peruse the MLS, direct market, advertise, etc.
- Determine Worth
Not worth of the property, but worth it in the overall scheme of things. Will it meet your financial criteria? For example, some people may only buy properties that will net them $20k, while others will be happy with $10k or even $5k or even$1k, if they plan to flip. It all depends on YOUR criteria.
- Make Offer
If the property is a match make an offer. Usually, it’s good to make a lowball offer initially as you can always work up. However, for certain properties (HUD especially), you need to understand what types of offers will fly and which ones will be a complete waste of time.
- Complete Due Diligence
Give yourself as much time as you can between the time you make an offer until the time you are fully committed to the deal to finish your due diligence, like running a title check, nailing down the amount of repairs needed, etc.
- Close
If everything is great with the property, you can now close. Note that depending on your criteria, you may just be assigning the contract or even birddogging the deal to another investor, so this step wouldn’t apply (to you).
- Exit Strategy
This is actually part of #1 above as you should ALWAYS have an exit strategy first. That is to say, you shoul ALWAYS know what you are wanting to do with a property before you even locate it (for the most part). This step is just the execution of that strategy.
HTH.