Sneaky Free Way To Figure Out the Best Zip Codes to Invest

I don't know how many of you have seen that show on TV called " Alone".  But my kids got me stuck on it, and I binged through 2 seasons like an addict.  Anyways, the show is about how they drop 10 people off in the middle of bear, cougar, and wolf ridden Vancouver Island with nothing but a backpack.  The person who survives the longest wins $500,000.

This idea intrigues me when you apply it to real estate.  If you had to "start over" in any given town in the United States, what would be the first thing you would do so that you could make sure you were investing in the right area?

In the survival show, the first thing the contestants did was figure out where they were going to setup camp. They wanted to look for areas near the water where there is tide, vegetation and activity so that they had the best chance of finding something to eat. They didn’t want to set up in areas of desolation.  And actually, if there were fish skins and Bear tracks, and lots of birds over the water, it would be even better because you know you could catch some great fish in that area.

So in real estate, we want to see where all of the Cash Buyers are investing. Cash Buyers are like seeing your bears and birds.  This will tell you a) Where you are going to the find the most deals that make financial sense, and b) When you get a deal under contract in this area, you will have a pool of Cash Buyers that you can market to or partner with.

So how do you know which zip codes have the most cash buyers? Let me teach you this sneaky but ethical secret trick on how to do it for free.

Step 1) Go to Listsource.com and create an account. It’s free.

Step 2) Click “Build a List”

Step 3) Select “County”

Step 4) Select your state

Step 5) Ad the county where you want to find cash buyers.

Step 6) Go to the upper tab “properties”

Step 7) Under “select criteria” select “Equity %”

Step 8) Select 91%-100% and hit “ad”. This will show you who has 91 to 100% equity in their property, meaning that they are a cash buyers.

Step 9) Next in the drop down menu, select “Property Types”

Step 10) Select Single Family Residential and hit “Ad”. You can also ad duplex and 4 plex if you want.

Step 11) Drop down to the “Last Market Sales Date” and select the last 6 months and hit ad. This will give you a list of everyone who has bought houses in cash as early as the last 6 months.

Step 12) Click the “options” tab

Step 13) Click Absentee Owned- This means they bought the property in cash, but they are not living in the property. This indicates that they are an investor.

Step 14) Hit “No preference” under trustee-owned properties & corporate owned properties

Step 15) Click “mailing address complete”. On the left hand side it will tell you how many properties have been bought in cash from investors in the last 6 months in your area. It will look something like this:

When I do this in my particular area, I come up with 220 cash buyers.

Now, what we want to do is find out which zip codes the properties were purchased in. That will tell us where we need to focus our real estate efforts. So…

Step 16) Click “Purchase list”. You’re not going to actually purchase it unless you have money to do so. If you DO have money for this, then go ahead and purchase it because this will be your cash buyers list that you can call on to see if they want to be added to your database. If not, no worries. We’re going to use other free methods.

Step 17) It will give you the option to “Purchase Partial List”. Click that.

Step 18) Select “Custom Selection”

Step 19) Select “zip codes”

Step 20) It will show you which zip codes have the most active cash buyers. THIS will be where you want to focus your efforts

Step 21) Click “export” then email it to yourself.

Step 22) Go to your email and download the list

Step 23) On the excel sheet click “sort” and it should show you largest to smallest

BOOM! You know where to setup camp now! Look at that excel sheet and see which zip codes have the most active cash buyers in them. These zip codes are your real estate honey-hole.  

You don't have to do a Harvard degree to do a real estate market analysis.  You just need to know where all the buyers are.