I’m trying to increase my purchases (because I only have one) for rentals, and I’m finding myself limited by time at my day job and with my family. I don’t mind sacrificing time to make a better future my family and I, but I need to be more efficient. So with that…
Mainly, for those of you buying 5+ properties per year (but feedback from anybody is appreciated) Where/How are you finding your best rental properties?
Are people calling you, due to ads you’ve placed?
Do you find them on your local MLS and just write a lot of offers?
Are you finding them at your local REI meetings?
Are you doing drive-bys and getting properties that look abandoned?
I got my first property from MLS - and it’s slightly negative cash flow. I paid too much - about 85% of retail - based on some bad numbers, including the previous rent of $1,300 a month, which was an outlier (i could have rented to that tenant, but all the neighbors warned against it, so i didn’t). I’m in Houston.
Since you are looking for rentals the amount of equity you are actually looking for will most of the time be a bit less then if you were looking to wholesale your deals. In the wholesale deals you need to leave room for the end investor, but with a rental you are the end investor.
Having said that, it is possible to find your deals on the MLS. If i were in your position i would do two things.
1 Identify the neighborhood you want to buy in and make sure you understand the values there (how much properties are worth, how much they can rent for, etc.) Learn it to such a degree that you can look at a potential lead and know with about 90% certainty whether it’s a deal or not. This will save you a bunch of time in running around and looking at bad deals. This way if you are going to be looking at something, it will hopefully make sense to buy.
2 Get as many realtors as you can that work in those neighborhoods to get you potential deals. Explain to them how you work the numbers and exactly what you are looking for. If you do that with enough agents a few will actually start getting you some good stuff. Do this same scenario with your local wholesalers.
Doing these few things should start getting you to work smart, and not just hard.
I get most of my properties through personal contacts. I agree with peterv that it is possible to buy rentals from the MLS, but those deals are usually few and far between. I prefer to target desperate sellers. One of my best sources of deals lately has been from disgruntled landlords at the REIA.
I think the BEST way to find great deals is to get out of the house and meet people. People call me because they know that I WILL close on deals if they meet my criteria. So, my advice is to get out of the house; join your local REIA; let everyone know that you’re a serious investor; and then follow through when someone brings you a great deal.
i was focused (on my biz and on a particular area) for a while, but that was during the boom time, and there were no mls deals in houston, so that didn’t work so well - lots of driving (i’m licensed, so i could pull my own info - now i’m inactive, because my broker closed and i haven’t sought a new one.)
i was a member and going to the RICH (an rei club) meetings in houston for a year, but the membership is SO large (largest in existence, i think) that i was just kinda “there”.
throw in a 1 year old kid, and all of the movement (houston is a big place) to find a place, meet people, etc., was taking a lot of time. plus i travel a lot for my day job.
time to regain “focusness” - especially on the area i’m in.
I am in Houston also. All my preoperties were REO. There are brokers that specialize in REO. I will PM you their sites. They have 5 days or somehting like that they can take before they have to post them to MLS. During that time if it is a really good deal they will call me. You need to contact these guys. There are deals out there on MLS but make sure you check them out first.