BiggerPockets

It's all a numbers game. The more houses you look at, the better chance to find one with the right percentages.

What is a HUGE discount to you? 30%? 35%?

The best way to find houses with HUGE discounts are to go directly to the house owners and market to them. Market to the home owners that have no idea what to do with their houses.

They are out there.

I have been doing somewhat of a blanket area. I am looking for long term investments (buying then renting). Run down is ok to an extent. I have no experience doing full rehabs so I am trying to avoid anything that would require a significant amount of work to get rent ready... at least until I get some more experience.

let me know if you have any other questions!!!

What exactly have you done to find properties at a hugh discount?

Mike

I have scoured the internet, talked to a Realtor, and networked with a handful of local real estate investors that I know are legit and have experience... Short of going door to door, or foreclosure acutions I am not sure what else I am missing...

Mike, thanks for the insight. I am working with a Realtor who is an investor. She owns about 65 units herself, so in my mind she qualifies as an investor Realtor (please correct me if I am wrong on that one...).

I will put an add in the paper, I had not really thought about that...

Since my Realtor invests maybe I will work through her to meet other experienced investors who can help me find these deals...

Thanks!

If anyone else has more ideas keep em coming!!

:mrgreen:

Just because the Realtor has 65 properties doesn't mean she bought them at HUGE discounts. You still didn't tell us what you think HUGE is. I find maybe 1 or 2 properties a month that are HUGE discounts. Just recently though. I am a Realtor and it took me 2 months just to figure out where to look for the properties. Usually if they go on the MLS, by the time a Realtor finds them on there they are under contract or gone.

A good Realtor can find them. Also sometimes things don't look like a good deal, but when you make the offer at such a lowball price occasionally it actually gets accepted. We are making approx 20 to 30 offers a month on properties and 1 or 2 stick at the lowball offer. They are all cash offers with 10 day closings so I think that helps. I am in South Florida. Rental income homes go anywhere from upper $100 k's and up. The other day I found a property for $73,500. It was a 2/1 and 1/1 duplex with a pool in a so-so area. I found it before it was listed, and after I had the contract in 3 other offers came in. Luckily mine was full price all cash, and the first one recieved so we got it. Property needs anywhere from $9,000 to $25,000 worth of repairs (depending on exit strategy). I charged my buyer an additonal $5000 just to give them the exclusive opportunity to buy it from our pool of investors and she happily agreed to that.

The point is, this is the best deal I have found lately, and only 3 other offers were submitted so obivously there aren't a whole lot of realtors who know what I know. Back in the boom this house was sold for $289,000.

My advise, get a good realtor! I don't know how to tell you to find them, because I don't even know how to get the word out that " I'm the man" down here. If you figure it out, let me know.

I have not said what I would consider a huge discount because I am honestly not sure... I have not been doing this long enough to get a good idea of what the term HUGE means in real estate... in my mind it would be something like 70%... thats HUGE... but from what I have read 30-40% is considered HUGE... so I guess what I need to do is get a better handle on what kind of discounts are out there (by finding these deals) then I may be better able to define HUGE...

It is difficult to find properties at 50% of retail value in nearly every market. These great deals represent less then 1/4 of one percent of the properties for sale even in a good area and they are usually not on the MLS. You will find these deals by personal contact. Knowing the other SUCCESSFUL investors in your area and meeting the right people are critical if you want to find these deals. You need to be known in your city as someone who can and will buy properties quickly at the right price.

In addition, most of these deals won't be in pristine condition. Some will need cosmetic work and others will need a complete rehab. That must be considered in the evaluation of the property. When I consider a property, I consider the acquisition cost (purchase price + rehab cost) and have only been buying at an acquisition cost of 50 cents on the dollar or less. My best so far has been at 13% of the market value for an apartment building, but even that isn't as good as some of the other members on this forum.

Mike

What makes a good deal can be a little different for everyone. People have different goals and different resources (money).

In general I look at 20% below market as BREAK EVEN. To buy a house, settle on it, market it, pay carrying costs, and have a second settlement can be about 15-20 % in soft costs. Most properties won't cash flow unless at least at 20% below market. All of this assumes NO repairs needed.

A common formula that people use is 70% of after repair value minus the repairs = the maximum offer. That means 15-20% goes to soft costs and 10-15% is your profit. Frankly I want much better deals than that. Remember the formula says that is your MAXIMUM offer. I have bought for as little as 5 cents on the dollar and I wholesale at generally under 50 cents on the dollar.

How do you get such discounts. Well some people are succesful in the pretty house business but I figure those kinds of discounts come from serious fixer uppers. My main business is going after vacant propeties.

Good luck,

Ned Carey
[url]Firstly, You are NOT looking for properties, you are looking for motivated sellers. Real estate is not hard to find; the earth is made out of it!:D What you are looking for is GOOD deals and they come from motivated sellers.

Think about what might motivate a seller; bankruptcy, divorce, death, job change, job loss, foreclosure, burnt out landlord etc etc. Now find a way to reach those sellers.

As someone already said most of the best deals come from dealing directly with the owner, not listed properties. Also many good deals are negotiated. I have heard of some massive drops in price that have been negotiated. You have to make offers. You just don't go looking in the MLS for owner financing, no money down deals at 60 cents on the dollar. They may be in there but they are negotiated that way not listed that way.

Ned Carey

but, Annie - are you sure you spelled C-O-U-N-T-R-Y-W-I-D-E correctly ?
from my understanding YOU HATE THEM :lol:

atarget ( rite on a target )

Well I have gotten the business cards, handed them out, made my intentions well known to those I have talked to, I guess I just need to rinse and repeat until a good deal comes my way...