Real Estate Deal Analysis & Advice

5 Tips From Expert Real Estate Investors For Handling a Lack of Good Deals

Expertise: Business Management, Commercial Real Estate, Landlording & Rental Properties, Real Estate Deal Analysis & Advice, Mortgages & Creative Financing, Personal Development, Real Estate Investing Basics
126 Articles Written

When I first got started with flipping houses, I got my first deal off my first postcard campaign. I thought I was a genius! Then my mentor reminded that me I probably got a bit lucky and that it takes most people six to nine months to get their first deal.

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And sure enough, that second deal remained elusive for months, and I might have given up had my mentor not continued to encourage me enough to handle this “waiting” period.

Similarly now, I am frustrated by the lack of deals. I've had two apartment buildings under contract in the last three months, and neither of them worked out during due diligence. It's frustrating to faithfully work the business like you know you should and not have anything to show for it.

Frustrating. What to do?

I asked three experienced apartment building investors (Ben Leybovich, Brian Burke, and Joe Fairless) how they handle the waiting game, and here’s what they said.

Ben Leybovich

“First of all, what is a good enough opportunity is, as they say, in the eye of the beholder. I see plenty of smaller projects which 5 years ago I would have jumped all over, but not today. Five years ago I was a beggar, and as you know, to a large extent beggars can’t be choosers, so I did worked harder for less return than I am willing to do now. Time and circumstances adjust our perspectives.

But what this means is that it’s incorrect to describe the current environment as void of opportunity. I don’t want these deals, but for someone coming up through the ranks these may be perfect.

Related: 8 Tips to Find Great Deals When You Keep Getting Outbid on the MLS

Secondly, while it’s true that I am striking out on finding the deals I want, this doesn’t mean I am “waiting.” I disagree with you, Michael, that there is nothing wrong with waiting–you remember Dr. Seuss, don’t you?! The waiting game is not for us. Minutes, hours, and days are too precious to sit around and wait.

I find myself shifting gears. I am interested in RE of a very specific type, and it is hard to find. I keep looking and underwriting deals every day, but at the same time, I am working on other projects and revenue streams.

My genetic make up is such that I can’t wait.”

Brian Burke

"I handle it in two ways. First is to simply understand that this business can be feast or famine. I know that the tides change, and as long as I am consistently and actively trying, the right opportunity will present itself eventually. The second defense is to have multiple streams of income, even if they are all real estate. Flips, rentals, multifamily rehabs and holds–whatever it looks like, I have to have a variety of strategies in play so there is income even when one strategy is off-cycle.

But what if you don’t have the luxury of multiple strategies producing income? This business is all about employing the right strategy at the right time in the right location. If you aren’t finding a deal, you are employing the wrong strategy in your market right now. Either change your strategy or change your market (which means employ your strategy somewhere else where it is working right now).”

Joe Fairless

“Don’t focus on not getting a deal. Focus on two things:

  1. What you can do to prepare yourself for getting a deal
  2. What tactics can you implement to get the deal

Re: the first point, do you have all your ducks in a row? Usually there's something that still needs to be done, whether it's solidifying financing partners, making sure you have the equity required for the purchase, making sure the property management solution is in place, etc.

Re: the second point, drive for dollars and find distressed properties, then call on them. Do direct mail. Take brokers out for lunch. Start a meetup group and become a thought leader in your market so you get more deals sent your way. There's always something else you can do to find a deal. "

Lessons Learned

There are (at least) five lessons learned in the wisdom from these three experience multifamily investors:

  1. “Waiting” is a necessary part of investing but does not imply inactivity.
  2. Do not grow impatient and abandon your strategy prematurely.
  3. Evaluate and adapt your strategy; consider pursuing more than one at a time to achieve multiple income streams.
  4. Don’t put too much pressure on yourself by focusing on the outcome; focus on the activity, and the result will come.
  5. Make sure you have all your ducks in a row. What could you be doing that you’re not doing right now?

Related: 6 Steps to Finding Amazing Deals — Even When They’re Scarce

We all experience setbacks and delays that force us onto a timeline we don’t want. What’s different is how we handle these challenges. And what you don’t hear from these 3 investors is that they’re discouraged and are giving up.

That’s the last lesson, and a good one for all of us.

Thanks, guys, for your perspectives!

What are you currently “forced” to wait on?

Let me know your thoughts with a comment!

Michael Blank is a leading authority on apartment building investing in the United States. He’s passionate about helping others become financially free in 3-5 years by investing in apartment buildi...
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    David Roberts from Brownstown, Michigan
    Replied about 5 years ago
    This is one of the reasons I became a realtor. Not only can we do our own deals and gain access to MLS, we can help other investors find what they want and provide that service. I think its great to be an investor but also be able to service the public even if its part time. Nice article
    Tim LaGro
    Replied about 5 years ago
    Good evening, looking for advice on flood insurance. I didnt have it when I bought this property. Does mortgage company require it? How can I shop for price as premium doubled this year and property is in middle of ohio? Thanks, Tim
    Stu Leventhal
    Replied about 5 years ago
    There is never a dead market place or lack of good deals! The key is in turning the bad deal into a good deal. Waiting nine months for the perfect deal is the silliest thing I ever heard. If there appears to be no good deals then make a bunch of low ball offers I guarantee someone will bite! Realize that many inexperienced sellers just believe they should set their initial listing price very high. Their logic is; always start out really high because no one gives you what you are asking plus you never know you might get lucky and someone less experienced than you, at negotiating, gives you the listed price. Plus sellers rationalize that they can always lower their price later. Thus you never really know what price you are looking at until you make an offer. Plenty sellers expect to be low bid especially during complicated markets. Also people list at one price then stuff happens that changes the sellers urgency to sell. Figure out the price you need and bid it regardless of the asking price. What do you have to lose? You already did all the research to find the property and you took the time to analyze it, so make a play. After all, It is all about timing and you make your own luck. One person’s bad market is always someone’s opportunity.
    Don Alberts from Frankfort, Illinois
    Replied about 5 years ago
    Excellent! That’s what I need to hear. Plan for results continuously, fine tuning my approach. Multiple streams of income requires multiple strategies. Think positive results while taking positive actions. Thanks Don
    Jett Rao Flipper from Calgary, Alberta
    Replied about 5 years ago
    Good article! I can very much relate to lack of deals and this serves as good motivation.
    Michael Blank Rental Property Investor from Northern Virginia, VA
    Replied about 5 years ago
    Thanks Jett and Don!
    Katherine T. Real estate investor from Alabaster, Alabama
    Replied about 5 years ago
    Thanks for the article. I like the idea of throwing in low ball offers. Ther’s nothing to lose! Good for new investors in helping build confidence.
    Ayodeji Kuponiyi Investor from King of Prussia, Pennsylvania
    Replied about 5 years ago
    great post Michael! Thanks for sharing
    Russell Brazil Real Estate Agent from Rockville, MD
    Replied almost 5 years ago
    When you said Joe Fairless…I thought you were talking about the individual named Joe Fairless who has the podcast lol