We all want that home-run deal right? Truth is, these types of deals are very hard to come by, especially when you aren’t the one going out there and finding them yourself. If you are relying on the MLS, a Realtor’s pocket listings, or a wholesaler, more often than not you are going to only get good deals—not GREAT ones. Want more articles like this? Create an account today to get BiggerPocket's best blog articles delivered to your inbox Sign up for free In this article, you will learn some of the ways that you can go about generating leads and finding real estate deals. It will entail making calls—and even getting people to call you. Some of these people will be tire kickers (only calling to see if you will offer them market value for their home) and others will be highly motivated. In order for us to get that home-run deal, we not only need to find sellers who are highly motivated but also those who have a home that we can get for well under market value. Generally, these are going to be homes that need a lot of work. But we are going to add a ton of value through cleanup and rehab. (Note: I would not recommend putting your personal phone number on any outbound pieces of mail or fliers. Get a dedicated phone for your business or a google number for you area code.) Multiple Listing Service (MLS) Listings This is the most basic way to find homes for sale. Here, you will be looking at all the people in your area who are actively trying to sell their home. Gaining Access You are going to have to do some research to find a real estate agent in the area you are looking to buy. A great place to start is Zillow's agent finder. You will input the zip code where you're looking to purchase and up pops a list of some of the top-performing agents in that area. It is a good idea to call as many of these as you have time for and start to build relationships with the ones who answer your calls. Narrowing Your Search Usually during these first calls, the agent will ask you to describe to them exactly what you are looking for in an investment property. The agent will then set you up with an email alert that will send you emails whenever a home hits the market that meets your criteria. Here are some criteria that may help you get started: Number of Bedrooms/Bathrooms Square Footage Lot Size Specific Neighborhoods/Areas Price Point A good agent is going to help guide you through these criteria so you can narrow your search down to only the properties that are truly of interest to you. But it is a good idea to know these answers ahead of time. Networking Advantage As you start to build relationships with agents in your area, you may start to receive what are referred to as pocket listings. These are listings that the agents will come across from time to time that they will show to their buyer contacts before releasing onto the market. This is why it pays to network with top-performing agents in your area. These pocket listings may contain some great diamonds in the rough. Conclusion This method is probably the least likely to get you a spectacular deal, as you will be competing with every other person who has access to the MLS. There are absolutely deals that can be found though, especially within certain markets. So, you should not pass up the opportunity to be checking out the MLS. It’s also the cheapest route to go. It literally doesn’t cost you anything but some time spent making phone calls and checking emails. Drive for Dollars This is another inexpensive way to get some leads. Then, you can reach out to them through methods we will discuss later. While you will have to spend some money in gas, the main component here is time spent driving around and researching owner information. What Is Driving for Dollars? I first heard about this tactic from the great Brandon Turner. You simply get in your car and drive around every neighborhood that you may want to purchase a property in and look for any signs of distress or vacancy. You are just going to be looking for homes that you might be able to purchase under market value and noting any addresses that you find that would be worth reaching out to. Pro Tips Map Your Route I would recommend going to Google Maps and mapping out an area that you want to cover. That way, you can set up a route to follow that will maximize your driving time and avoid driving down the same streets more than once. Research Your List After you have created a list of distressed or possibly vacant properties, the next step is doing some research to find out the owner information for each house. This can be a time-consuming task, but if you are on a budget, then time is your highest marketing asset. Often it is possible to find the information you are seeking on the county assessor’s website. To do this, just Google “(insert your county) assessor.” Most of the time, it will be the first result that is displayed. Go to the website and type in the specific address of each property; up pops the information for the owner of the property. If you are having trouble with the site, just give the assessor’s office a call. They are more than happy to help you out… usually. What to Do With Owner Information So, you have a list of information for owners who have distressed or possibly vacant properties. Now what? This is where to incorporate one or all of the strategies below: direct mail, cold calling, or texting. A Final Tip I am not a big fan of driving around in my car, but I still wanted to incorporate this strategy into my lead generation somehow. I actually started talking to UPS and FedEx drivers about what it was I was looking for. Some of them were interested in putting a list together for me at a fixed price. (I offered $1 per address.) As soon as I started telling them about the type of home I was looking for, they had some that they already could think of pop into their head. (These drivers see the neighborhood every day, after all.) Of course, not all drivers are going to be interested. Conclusion Personally, this isn’t the best use of my time anymore. I did this when I was first starting out to generate a more targeted list to send mailers to and was able to generate some decent leads from it. But now I believe there are better methods out there. Related: 27 Ways to Find Real Estate Deals Door Hangers Door hangers are very seldom used and can be a great way to get owners to call you. However, a lot of them will be what we call “tire kickers.” These are people who are just reaching out to see if you will make them an offer they can’t refuse. These are not the people we are looking for. This strategy is going to have a small startup cost and again is going to require a lot of time spent walking neighborhoods and hanging fliers on doors. This is a great way to get to know the neighborhoods you intend on buying in, as well as an opportunity to be friendly toward the people in the area. As a bonus, you are outside getting exercise! How to Door Hang Go online and search for a company that makes door hangers. Create a customized door hanger with your business phone number on it that says you want to buy their house. Walk around neighborhoods and hang them on the door of any house that you would be interested in purchasing. Answer your phone and talk to homeowners about purchasing their home. Conclusion This is definitely not the most effective method to getting truly motivated sellers to call you. But if you are on a budget, have the time, and like being outside walking around, then this is a good strategy to get you started. Direct Mail Direct mail is still a very common strategy—if not the most common—used by investors to get leads. What it entails is sending out a letter to a property owner that says who you are and that you are interested in buying their house. It can be a great way to get your name out into an area, as many people will see your letters in a short period of time. However, most of the people who you will be sending letters to are just not going to be interested in selling their home. Building Your List The first step in sending direct mail is developing a list of people to target. This could be the list that you created driving for dollars (or had someone else compile) or a list that you created from one of the many relevant websites or software programs available on the internet. One of the most popular is ListSource. Sending the Letters You have a couple different options as to how you want to go about the letters. The most effective letter is one that is handwritten. That is to say that a handwritten letter has the most chance of someone opening it and actually calling you. You can either hand write your letters yourself, stick them in an envelope, stamp them, and then take them to the post office, or you can hire out a company that does this whole process for you. In my experience, the cost is almost identical with both strategies when you factor in the paper, envelopes, and stamps. However, as mentioned, the ones that you write yourself have a slightly better rate of response (i.e., people calling to inquire about the letter). They just have a more personal quality to them that a company cannot provide. Conclusion The biggest problem with direct mail is that almost all the people who you are sending mail to are not motivated sellers. These are just people going about their day like normal, who suddenly get a letter in the mail stating that you want to buy their house. These people don’t have any intent to sell. With that said, you are going to get people calling you from a direct mail campaign. It is how you follow up with these leads that will separate you from the pack. Cold Calling/Texting Cold calling can have a very negative connotation to it. But don’t be fooled, this is a very valuable tool to have in your toolbox for finding motivated sellers. There are a couple different ways to go about this. You can literally open up a phonebook (yes, they still exist) and start dialing. Call each number until you reach someone who answers and is actually interested in having a conversation with you. Alternatively, you can go off one of those lists that you have from driving for dollars or a website. Scrubbing Your List If you are using a list that you created, then there is going to be some more work to be done before you can start making phone calls. See, up until this point, you only have the address for these owners, but you are going to need phone numbers now. Again, there are many services online where you pay a monthly fee and can generate someone’s phone number from the details that you have already. It takes some time, but you simply input the name and address that you have on hand, wait a couple of seconds, and voila—phone numbers! Related: No. 1 Most Effective Way to Master the Art of Cold Calling Honing Your Calls When you start the calling process you should have an elevator pitch ready to go before you even dial your first number. This is going to be 10 to 20 seconds long. Introduce yourself, and explain that you are interested in buying houses. Ask if they have any house they may be interested in selling. You don’t want to sound over-rehearsed, but you should say generally the same thing every call. Promoting Your Cause Almost all of the people you talk to are not going to be interested. But if they have listened to you, it likely means they are open to becoming a valuable lead generator for you. As soon as the person says they don’t have a house they are looking to sell, I like to ask them if they know anybody who might. I let them know if they refer them to me, and I can close on a deal, I will give them a kickback. Personally, I like offering $500. It is enough to really incentivize the person on the other end of the call. Is there anyone out there they know who might need to sell their house? If so, suggest they reach out to that person and give them your number. Texting En Masse Texting should follow the same guidelines as calling, except that you are going to want to get a service that allows you to send a mass text out to every number on your list. Conclusion Cold calling/texting can be a great cheap way to find a motivated seller—especially if you are literally just cold calling out of a phone book. In my experience, you will find about one deal per 1,000 calls made. know, that sounds crazy. But if you made 1,000 phone calls and got a deal that turned into a $10,000 wholesale, would that be worth it to you? Craigslist There are two potential ways to use Craigslist. One is to go looking for any properties that are listed for sale or for rent. Then, call the seller or landlord and get into a conversation about their property. The other way is to go and advertise that you are a house buyer in the area and get people to call you about selling their house. Keeping Track of Leads When searching through the droves of people who have their house listed, it is advised to keep track of which ones you have called already. This is because the same listings will be posted throughout the day sometimes and definitely will be listed day after day. It will grow tiresome very quickly when you call the same person multiple times. Starting Conversations You are going to want to begin a conversation with people who have their house listed for sale differently than people who have it listed for rent. With a person who has it listed for rent, politely ask them if they would be open to hearing an offer from you. Most of the time, these people are going to decline. Of the ones who say, “Sure,” you are still going to get almost entirely noes toward your offers. Remember, these people weren’t interested in selling in the first place. This is simply a numbers game that you have to wrap your head around if you want to get a deal. In order to close a deal on a house, you have to make offers. Marketing Your Business The second way to use Craigslist is to actually market that you are a cash home buyer in the area. I recommend putting together at least two ads, but I prefer to do four. You are going to put these ads up at least twice per day, which is why it is beneficial to have multiple versions. These can just simply be different pictures that you display with your ad, but generally you should change the wording in them, as well. It is best to at least put one up around 7 a.m. and 7:00 p.m. These are the most common times that people are on their computers and phones (i.e., before and after work). I like to do one around noon, as well, to try and get people who might be clicking around while they are on lunch. Keep these ads as simple as possible. For example, highlight a few key points about how you are a cash buyer, can close fast, and don’t care how much work the house needs. Provide your phone number and email address for people to reach out to you if they are interested. Conclusion Do not expect this to start generating a bunch of high quality leads right from the get-go. But if you stay the course and post these every day, you will get leads over the long haul here. FSBO FSBO, or For Sale By Owner, is a great way to find owners who are looking to sell. In fact, FSBO sellers may be more willing to budge on price than those who have listed with a real estate agent. I will say, many of the people you come across are going to know what the value of their home is and are going to stand fairly firm on their asking price. But there are other people out there who have had their homes listed for a long time and haven’t gotten any offers. This might happen when a property is too distressed and rundown. These are the people you want to find when you are looking at FSBO listings. You can find FSBO listings online by simply typing “FSBO” and the city where you are trying to buy into Google (or you can just stick with Craigslist). Conclusion This is a great way to find deals on homes. These sellers don't have to pay a real estate commission; therefore, they may be more willing to negotiate. Plus, you are talking directly to the seller instead of through your agent and their agent. Wholesaler If you don’t know what a wholesaler is, I will explain. A wholesaler is someone who uses one, some, or all of the methods that I have listed here (and even some that I haven’t) to find a home owner who really needs to sell their house and is willing to for a great price. This wholesaler will get the house under contract for well below market value. They will then go to a list of buyers who they have met throughout their career and show them the house, how much it is going to need in repairs, and what it will rent or sell for once fixed up. They offer these buyers the house for a price that is above what they “paid” for it, making a profit off the difference. I write “paid” because a lot of the time these wholesalers don’t even take possession of the house. They will simply sign a contract on the day of closing with the original seller, saying they bought the house for X, and then sign to the new buyer that they are selling it for Y. This is where the term flipping actually came from. They flip the contract from themselves to the end buyer. Wholesaling is where a lot of investors get their feet wet in real estate. This is because, as a wholesaler, you have to learn a lot about finding, negotiating, and closing deals, as well as estimating the cost of repairs and the after repair value (ARV) of homes. Related: Wholesale Hacking: How to Find Monster Off-Market Deals Before Anyone Else Networking Effectively For you, the one who is trying to buy a house, it’s important to meet these people who are out there finding deals. Yes, you want to meet the ones who are getting multiple deals per month, but you also want to find the ones who are only getting one per year, as well. The more options you have, the better. The best way to meet these people is by going to REIA meetings in your area. If you don’t live next to an area that has a local REIA meeting, doing a quick search on BiggerPockets can grow your network. Another good idea would be biting the bullet and driving to the closest one. No matter how you go about it, you must get into contact with wholesalers who are closing deals in your area. Conclusion If I were to go out on a limb, this is by far the easiest, cheapest, and least time-consuming way to find a good deal. While getting deals through wholesalers may be the easiest way to find good investment properties, you won’t get the absolute best deals out of these people. They are running a business themselves, so they need to make a profit, too. What this means for you is that the margins are going to be a little thinner, but you are going to be able to make consistent profits. Getting in with good wholesalers is probably the best approach for someone who either wants—or needs—to be pretty hands-off. This is because someone else is out there hitting the pavement, answering the phone, and closing the deal for you. Networking OK, this sounds very generic. Of course, we are going to be out there networking. But how is that going to bring in deals? Well, the networking that I am talking about is going to happen in places you might not think of at first. I am talking about speaking to divorce and probate lawyers in the area, mortgage companies, contractors, and other people who are associated with real estate—but not necessarily part of the buying and selling process. How Networking Works A lot of the time, contractors will walk into a house and make a bid on it, only to find out that the homeowner can’t afford to do all the repairs. They could suggest to that homeowner that you could purchase the house from them for cash; they could just move on with their lives. Then, after you buy it, you turn right back to that same contractor to get the house fixed up and ready to rent or sell. Win-Win! Conclusion This type of networking is killing two birds with one stone so to speak. You are building relationships with people inside the real estate industry—people who you can turn to down the road when you have a house that you need to get financed or have some drywall that you need to hang. These people can also serve as more boots on the ground who could potentially find you a deal that isn’t listed for sale just yet. PPC Have you ever typed something into Google and noticed that the first one to three sites that show up have the word “ad” next to them? Those companies are paying to be listed in those top spots. This is called an ad impression. Here’s the kicker though. They don’t have to pay a dime unless you actually click on their ad—hence the name “pay per click.” You can have as many ad impressions as people typing in your phrase, but until someone clicks on your site, you don’t have to pay anything. Now, you don’t want people to just see your ad. You want people to click on your ad and then call you or fill out a form with their information, so you can call them. That is a very short explanation of how pay per click advertising works. Showing Intent Up until this point, the only leads we have that are actually trying to sell their home are those listed on the MLS, Craigslist, or FSBO. Pay per click advertising generates leads that have shown intent to sell. They had to go onto the internet and type in a phrase that you were advertising for and then click on your ad, read your content, and fill out your form. They didn’t just randomly receive a letter from you in the mail or find a flier on their doorknob. They actively searched for someone to buy their house and found you. Depending on what market you are advertising in, each time that someone clicks on one of your ads, it could cost you anywhere from $10 to $50. Each industry is different. But for real estate, you can expect that out of about every 10 clicks, you will get one person who calls you or fills out your form online. This means that you will spend anywhere from $100 to $500 per lead, depending on your market. Conclusion Pay per click advertising is more often than not the best way to get motivated sellers calling you on a consistent basis, short of having a very high ranking website (which we will get to). The most common platform for pay per click advertising is Google, but you can also do PPC on Bing, Facebook, and even Instagram. (Note: If you are new—and most likely you are—I would highly recommend finding someone who is an expert in pay per click advertising to run your campaign for you. This will ensure that you get the best results possible right from the get-go and don’t waste your hard-earned money on advertising in a way—or to people—that is not going to benefit you.) SEO Search engine optimization (aka SEO) is the process of building a website using specific tactics to positively impact its ranking in search results. The goal is to rank in those top spots when internet users are searching for certain terms—specifically those terms that are targeting with our PPC advertising. SEO is a very long process and has many different factors involved. I am no expert—yet! Once your website is optimized, it is basically functioning as free advertising online. Your page will appear at the top of the list. This is no easy feat—but it’s worth it. A high-ranking website can generate leads for you in your sleep at literally no cost. OK, that’s not entirely true. Getting your website to rank high can take years and thousands of dollars (if you were to hire someone to do it for you). And even if you took the time or paid the money to improve the ranking of your site, there is no guarantee that you will ever reach that coveted first page of Google search results. Conclusion If you can get your site to rank in the top five on Google, you are looking at high quality leads similar to that of pay per click at the price of a cell phone bill (so that you are capable of receiving calls from motivated sellers). Final Thoughts You now have a lot of tools at your disposal for going out there and finding investment properties. There are probably even some that I didn’t cover and haven’t tried. (I would love to hear about them in the comments below.) So, What’s the Best Way to Find Real Estate Deals? If you are tight on money but have a lot of time, maybe your best bet is to get with a Realtor, set up an email alert when something comes on the market, and get out there and drive for dollars. If money is something that you have plenty of but you cannot spare the time, then you should get hooked up with wholesalers and start making offers on the deals that they generate. Truthfully, any of the strategies that you have read about are viable now. Because no matter which direction you decide to go with your marketing, it is all a numbers game. The most important thing that you can do is get out there and start making offers. Wayne Gretzky said it best: “You miss 100 percent of the shots you don’t take.” If you aren’t out there making offers, there is absolutely no way that you are going to get any accepted. That is just a plain and simple fact. I make no claims of being a marketing expert or guru. I am simply stating my opinions, which are based on the experience that I have gained over the years using these methods. The best thing that you can do is test them out for yourself and keep detailed notes about the successes and failures that you have. There are things on this list that I will probably never do again, and there are things missing from this list that will produce more deals in the years to come. What do you think: What’s the best way to find real estate deals? Share in the comments below!