Modern Day Real Estate Investing: How to Find and Manage Great Deals from Anywhere

Modern Day Real Estate Investing: How to Find and Manage Great Deals from Anywhere

6 min read
Dave Van Horn

Dave Van Horn is a veteran real estate investor and CEO of PPR Note Co., a $150MM+ company managing funds that buy, sell, and hold residential mortgages nationwide. Dave’s expertise is derived from over 30 years of residential and commercial real estate experience as a licensed Realtor, real estate investor, and private lender.

Experience
Beginning his career in construction and as a Realtor, Dave bought his first investment property in 1989. After years of managing his own construction business, Dave became a full-time real estate investor, specializing in fix and flips, buy and holds, and eventually commercial projects, before moving into note investing in 2007.

Over the past decade, Dave has also invested his time into becoming a connector and educator, who helps others achieve success. He focuses jointly on helping accredited investors build and preserve wealth with his group Strategic Investor Alliance and with general audiences through the annual MidAtlantic Real Estate Investor Summit.

Dave has also shared his strategies and experiences with real estate and note investing via hundreds of articles published on the BiggerPockets Blog and with his acclaimed book Real Estate Note Investing.

Press
Dave has been featured on the BiggerPockets Podcast twice (shows 28 and 273), as well as episodes of familiar podcasts, including Joe Fairless’ Best Ever Show, Invest Like a Boss, Cashflow Ninja, and many others. He also has been a guest of Herb Cohen’s on Executive Leaders Radio, which airs nationwide.

Accreditations
Dave is a licensed Realtor with eXp Realty with CRS and GRI designations.

Follow
Dave’s LinkedIn
PPR on LinkedIn
PPR on Facebook
Twitter @DAVIDAVANHORN

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People often wonder how it’s possible for me to own and manage properties (currently around 75 homes at any given time) that are outside my geographic area. It wasn’t that long ago that this wasn’t the case. Although it’s going on 25 years now that I’ve owned and managed real estate, it’s only been in the last 10 years that I’ve considered doing so outside my own geographic area. So, what has changed?

The Internet

Since the Internet has taken off, many things real estate related have changed, and the global community has come closer together through social media as well. Although you’re listening to a guy who used to sell real estate in 1986 with a picture book, no fax machines, or cell phones and would cold call and door knock for leads to the point of contemplating suicide, the Internet has obviously changed the way we do real estate investing. I’m talking about much more than just utilizing the MLS here.

Many data services, not accessible before, now help us analyze real estate deals by determining value, courthouse data, insurance data, property condition, etc. Just about anything can be found online, especially through database searches within CoreLogic, RealQuest, Lexis-Nexis, and others. Today, we use so many affordable vendors; I feel obligated to mention a few. REO real estate agents and their networks are much easier to access and utilize. National insurance carriers can write affordable policies everywhere. And, my favorite is the modern-day property preservation companies.

Although the property preservation company I utilize is in Irvine, California, they do work in all 50 states, (including Alaska, Hawaii, and all US territories), and here are a few of the services they provide:

  • Property Renovations, Rehabilitations, & Repairs
  • REO Services Bundles
  • REO Maintenance & Landscaping
  • Property Preservation
  • Evictions
  • Cash-4-Keys
  • Deed-in-Lieu of Foreclosure
  • Vacant Property Registration
  • Code Violation Cures
  • Hazard Claims Estimates & Inspections
  • Property Inspections & Outreach Programs
  • Utility Services
  • Property Demolition & Land Grading
  • Facilities Maintenance & Repairs
  • Commercial Construction, Repairs & Maintenance
  • Road, Sidewalk, Driveway and Parking Lot Paving, Striping and Maintenance

Unique Ways to Find Properties

Years ago, I knew this guy that ran a board-up company in the Philadelphia area, and he owned about 200 houses. I asked my plumber, who was a close buddy of his, how this guy found all of his deals. My plumber said, “from doing all the work for the banks, he gets to see all the deals before anyone else does.” Hello! Why didn’t I hear about this strategy before? I realize you have to be a cheap vendor in order to work for the banks, but you do get to see all the good deals ahead of everyone else.

Just as my property preservation company has an inexpensive pricing matrix for general services, these venders, who are approved to do bank work, can also bid on HUD/FHA repairs, as well as partial and full rehabs. So if you’re a contractor, who hasn’t applied to be a vendor on some property preservation companies’ lists, I think you may be missing out on a huge opportunity, regardless of where you’re located.

So, how exactly can a vendor learn about these deals, and how much of an advantage is it?

Well, fairly often, banks will need work done prior to the sale. If they’re foreclosing and the property is vacant, they will take efforts to protect their interest, such as boarding up the property or winterizing it. Therefore, the vendor for the property preservation company, who is doing this work, will know that the property is bank owned, often times, before an REO Realtor is even brought in to sell the property. He/she could even be aware of the deal before the foreclosure sale.

Usually at a foreclosure sale, those interested are bidding sight-unseen. The property is secured and not listed with a realtor yet, so these bidders are not permitted inside. If this person was already working on the property for the bank, he/she has the advantage of having been to the property and may have a much better idea of what the property needs.

If the vendor comes in to do the work after the foreclosure sale, he/she will still have knowledge of which properties are bank owned. If he/she pays attention, they will know which one’s sold or didn’t sell. This person may then be able to put in an offer in with the REO realtor. Now, imagine if this person is friends with the REO realtor!

The best REO agents have a rolodex, or as we’d say now, a long contacts list in his/her Smartphone.
Obviously, being a vendor for a property preservation company isn’t the only way to find deals, especially in today’s sphere of electronic communication. I’ve found that a great way to find deals is through networking. I met one of my REO realtors, who always gives me great information, at a servicing conference. Many of the banks and REO agents go to these types of conferences, and, usually, they’re promoted online.

There are so many conferences, meet-ups, investing groups, etc. in the Real Estate world. It’s about reaching out, finding people you can trust, and then working with those people.

But, how can you know it’s a good deal when it’s not “right down the street?”

Now, with all the field services that are available to me, I can still get enough clarity and research to make an informed business decision. For example, I can get an REO realtor on the phone, who (I know from our conversations) has lived in that area for over 30 years. I can call this person up and ask him about the area, what the neighborhood is like, etc. He can send me pictures of the neighborhood; tell me what kind of person buys in that area, how often they sell, etc. One time I even needed a logging company, and my agent got me hooked up. This kind of information is invaluable, especially if it’s a deal outside of your geographical area.

Easier Ways to Manage Properties

There was a time, when I wouldn’t invest outside of the county I grew up in. I knew every street. I worked there my whole life up until that point. It was just my mindset. It wasn’t until after I moved some of my RE Investing to outside of my area (I do still have local deals as well), that I discovered it’s one of the most difficult counties to invest in. There are over 3,000 counties, and mine certainly wasn’t near the top.

Looking back, I realized that it’s almost risky to have all of my properties in one spot. I was overexposed to any changes that may occur or uncontrollable factors that could influence that area, with all of my assets parked there. After all, one of the reasons that banks have properties in all 50 states and insurance companies write policies across the US is to diversify their exposure, right?

My situation is slightly different—one of the reasons I own properties across the US is because many of these are mortgages and not just properties themselves. But either way, there are a few services that make it a lot easier for me to manage multiple properties.

Now I’m not saying this is always the case for everything, but there are situations where the property preservation guys are much cheaper than my local contractors, who usually work on my rentals. They use interesting strategies to make their services more affordable. For example, the preservation company will do cleanouts, by using dump trucks instead of dumpsters (no high fees or permits). They’ll put a lock box on for approximately the same money I could myself. They’re reasonable for extermination, winterization, changing locks, and even meeting utility companies. They’ll do site visits and even assist with evictions in deed in lieu situations.

I don’t have to go to the property. I don’t have to spend the time, gas, energy, etc. Nor do I have to manage the contractors if I use a property preservation company. They’re work is mostly volume and is also for the banks, normally. The company wouldn’t want to lose a contract, so they already have someone managing the contractors, and I don’t have to worry about what kind of contractor I have out there. Even if I was hiring someone, today, it is so much easier to get boots on the ground than it ever was before the internet. For one example, I can read reviews on Angie’s list before bringing someone in. With today’s technology, I can receive updates more easily as well. My roofer, for example, sends me videos or images of how the roof is coming along when he’s on-site.

I can honestly say that I am very comfortable owning property all over the US today. It really isn’t as hard as I once thought it was. You’re still doing the same fundamental due diligence; you’re just doing it in a different way. Is it still 100% as efficient as doing it yourself in your own back yard? Maybe not. But, I don’t necessarily think it needs to be.

So, I’m curious. In today’s day and age, what has made finding or managing properties easier for you? Has the Internet, or the use of vendors, improved your ability to invest in real estate?

Photo: Alba Soler Photography

People often wonder how it’s possible for me to own and manage properties (currently around 75 homes at any given time) that are outside my geographic area. It wasn’t that […]