5 ways to find incredible real estate deals to invest in.
You finally have your plan together, decide your strategy and chose your target market. Congrats!!
It’s time to start finding deals! Unfortunately, this is usually the toughest part.
Now I’ll admit, my girlfriend and I are fans of HGTV’S FLIP OR FLOP featuring the dynamic duo of Tarek and Christina, but we also remember that it’s just TV. They make finding the deal way too easy when in reality, there is more work behind the scenes that meets the eye.
(I also just found out they’re getting a divorce while writing this article, eeeshh.)
That leads me to introduce 5 straightforward ways to finding great real estate deals for your next rental or flip.
#1. MLS (Multiple Listing Service)
This is your location’s portal to 80% of real estate listings that are available for sale. Now remember, all listings aren’t necessarily investment worthy so it will be important to filter out those that will be. You can have an agent assist you with this. Majority of the foreclosures, short sales, and fixer uppers are located on the MLS. For New Jersey, you can log onto the GSMLS.com to access the biggest MLS in NJ (Those who have a real estate license have access to more information in the mls than the regular consumer). There are various MLS’s for NJ depending on the county you’re searching in so be sure to research that you’re looking at the right MLS to gain access to the most listings available.
The MLS also refers to various websites like Zillow.com, Trulia.com, Realtor.com, Craigslist.com, Redfin.com, Hubzu.com, and Auction.com just to name a few. There’s plenty of websites to choose from to search for homes.
Boom! Instant access to homes to flip or buy and hold!
Real estate is a numbers game. It will always come down to the financial numbers whether or not you will be successful in this business. There’s also a double edge sword to the instant access that the MLS offers. What do I mean?
With the immediate access to the MLS, you’ll be competing with virtually anybody who also decides to search for deals on the MLS. This can cause bidding wars which makes it more difficult to get the price you need in order to make the investment a win.
Nonetheless, as I mentioned previously, real estate is a numbers game and therefore, the more offers you send, the more opportunities will start to present themselves to you. My most recent investor got their deal straight off the MLS – smoothly I might add.
So start searching and sending those offers!
#2. Driving for Dollars
I’ve had my reservations about this strategy to find deals simply because of the amount of energy that I felt was needed to be spent in order to make this strategy work – driving around for hours looking for real estate deals.
Safe to say I was wrong and it does not require an insane amount of time to make this strategy work. You just have to make it habit. Literally get in your car and go out in your neighborhood or the area you plan to invest in and go searching for homes that may look like a great investment opportunity. It will also help you really learn your market which will give you added confidence thus making you a better investor.
Search for homes that look distressed. Homes that need a lot of work done to them or ones that just don’t look regularly upkept. Does the grass look like it hasn’t been cut since ‘62? Probably a sign of distress. Is the mail piling up in the mailbox? Possibly another sign. Look for any triggers that give you an idea that the house is either abandoned or not up to par. Take the time to jot down the addresses of these homes and you can either send direct mail to them or even schedule time to actually knock on the door if someone is still living there. Your objective is to find individuals that may be interest in selling.
You may find a home that’s vacant. A common scenario that happens is someone in another state receiving a home via inheritance. Whether they like it or not, they’ll be paying taxes on that property which can add strain to their personal budget, therefore, they may be looking to sell fast and at a discount. Since the inherited property will be vacant, you may have to check your city’s tax records to see if the property’s address is different from the owner’s address. If that’s the case, you can send them a letter say that you’d like to buy their property. They might need your help!
Whether you set aside the time to go DFD or make it a habit to jot down addresses while handling your normal day to day life, make it a habit.
My partner and I go driving for dollars and we have an appointment today 3/30 to speak with a seller about his plans.
Yes, it works.
#3. Direct Mail
This is the easiest way to get your phone ringing with seller leads. Direct mail. Basically hiring a service to blast out postcards/mailings to hundreds or thousands of addresses of owners who may be looking to sell. This is the more costly approach as you’ll need a solid marketing budget in order to keep this well-oiled machine going. Some of the industry’s professional could easily spend 20k a month on marketing. If you’re just starting out, pick a budget that works for you. This strategy could still have an effective return on investment on a much smaller budget if done consistently – you think I have 20k to spend a month?? Hell no! Not yet at least.
So where do you get potential seller’s mailing addresses from? It could be as easy as using your driving for dollars database or even going online and paying for motivated seller leads.
Listsource.com, Usleadslist.com, Absenteeownerlist.com, are well known websites to purchase a list of motivated seller leads to market to. There’s plenty more websites that you can research online. You can also go to your city’s public records office to gain access to homes that have been served a notice of foreclosure. This information is open to the public. Enter the data into a spreadsheet and add to your marketing campaign. The city might also offer access to Code Violations and Tax Delinquents.
Remember, anything that anybody also has access to can cause competition so as you can imagine, there is a possibility you may not be the only investor mailing to these sellers. Nonetheless, this is a great way to get your phone ringing!
Yes, networking to find motivated seller leads. We need to continue to treat investing as a business and act as such. When thinking of ways to network for motivated seller leads, think of who might be in contact with the individuals who may be looking to sell. It could be your neighbor, it could be a divorce attorney, it could be an agent who has a lot of foreclosure listings for sale. It doesn’t matter. All that matters is you communicate to everyone that you’re an investor and that you buy homes. What you put out into the world will come right back to you and if you’re able to meet the right individuals, it can cause your business to soar.
An easy way to think of who you would need to connect with is to reverse engineer a motivated seller’s situation. Put yourself in the seller’s shoes. Who would you need to speak with? Who would you be in contact with? It could be socially and it can be professionally, meaning, talking to your neighbor about the situation or speaking with a professional such as your attorney or bank rep. Anybody that you see yourself speaking to as the seller would be a great contact for you to try to meet and network with.
This may be harder for the introverts, that I understand. If it makes it easier, start with your own sphere of influence. This is everybody that you know now. You can ask if they heard of anybody looking to sell or if they know a professional they could connect you with. You can build your network from there.
According to Internet Live States, “Google now processes over 40,000 search queries every second on average, which translates to over 3.5 billion searches per day and 1.2 trillion searches per year worldwide.” People are constantly online, why not have a website that displays what you do? After all, we are in business and we have a service to provide. Create a website where sellers can provide you with their contact information for you to reach out the them and see if you can help them.
Creating the website alone won’t have motivated sellers knocking ringing your phone off the hook. You’re going to have to find a way to promote your website and find a way to place it in front of as many eyes as possible. If not, you’ll lose to the plethora of other websites that serve as competition. If you’re already a marketing genius, this strategy will be perfect for you. If not, this may be something that you can outsource while you handle another strategy. Either way, I believe every investor should have a website!
So go create a website and start advertising!
These 5 strategies can start you off on the right foot for getting in front of motivated sellers to build and grow your business. Whether you choose to flip 1 home a year or 100, these 5 actions when done strategically and consistently can help get your business to exactly where you want it to be.
You have the education, you have the knowledge, and now all you have to do is the action. It’s not going to get perfect out the gate, but over time, your business will get better, sharper, and more efficient. Trust the process and the rewards will be more than worth it. This is to serve as a guide to help you put the next spoke in your business together. Now it’s time for you to go out and execute!