I'm in the San Fernando Valley in the greater Los Angeles area and I'm curious how I should go about finding my first deal for a rehab and flip. Should I be starting to send out mailers, buying from wholesalers, and/or talking to real estate agents? What should I be starting with?
Go to a local REIA(real estate investor association)they usually all have an introduction period were they allow buyers and sellers to make a statement. You can advise your criteria and provide a phone number and email and that will easily generate more than enough leads.
My wife and I are actively hunting for deals for investors we work with like yourself in the Los Angeles area. There are a few avenues I can think of to find deals off the top of my head:
- Do your own marketing and find them yourself (for example: send postcards/mailers to out of state of owners)
- Work with an investor-minded real estate agent who have access to on and off-market deals
- Connect with wholesalers in your areas to find investor-friendly, off-market deals
Given the competitive nature and lack of inventory, I'd recommend you definitely at least work with an agent and connect with wholesalers. Finding deals through your own marketing is great, but there's some learning you need to do and upfront costs that may not provide a return in the beginning.
Hope this helps!
Meet as many people as you can in the industry, and take action! Don't get caught up reading everything you can and not putting anything into practice. You will learn the most by taking action and doing something. A lot of times that means you must either invest money, time, or both, but you have to invest something to help with accountability.
I think most new investors, and old, need to make a daily list of things to do. It's great to say you will network with other investors, or do a mailing list, but making a daily to do list gets you in the habit of marketing everyday and giving you much smaller goals that you can execute rather than saying you need 2 deals a month. So, on my list daily are things like checking for evictions on my local court website, mailing to 10 vacant houses, pulling expired listings, responding to craigslist ads.
I tell newbies to pick just 3 avenues of marketing and rock them consistently. Yes you can find lists of 50 different ways to market, but you will never be able to do them all at once, consistently, so pick three. Maybe it's bandit signs (commit to putting up 2 a day), expired listings (call 3 a day or mail them a letter), absentee owners (buy a list and mail 10 a day).
Find one REIA meeting to attend each month and commit to following up with 2 people there. Saying you will go and collect as many business cards as possible usually means you will just have a stack of cards that never do anything for you.
Find one local investor each week to call and network with, find them through local signs or websites or tax records of people that own many properties.
The key is to think small, while thinking big.
I'm in the LA area as well. Some of the REIs are awesome and some are pure cra...ummm...garbage. Tomorrow night there is the Club in Action (go to Meetup.com and find the details) that is very good. You can send me a private e-mail and I'll let you know which ones to avoid (can't post that...it can lead to all sorts of problems), and point you in the right direction. I've been doing this for almost a year and I'm on my 6th flip. Not a lot, but not a novice, either.
@Manny Cirino Yeah, I should start checking out the REIA's. It'll be a good way to network with the local investors.
@Joshua McGinnis Thank you for the insight, What area of Los Angeles do you and your wife look for deals in?
@Ben G. I agree that networking is everything, since moving to LA I've been able to meet some great people. What kind of investing do you do?
@Misty Weaver Thanks for all the info! You're are absolutely right with the starting small and doing the daily tasks. Thinking about everything too soon and too fast is just overwhelming.
@Mark Mynhier Thanks for the warning! I'll have to check it out. That's great, congratulations on all those deals! Where in LA are you working?
@Taylor Zenter we look all over LA County, primarily the westside (Beverly Hills, Santa Monica, West Hollywood, Hollywood, etc), san fernando valley (all over), and just south of the I-10 (Culver City, Jefferson, USC, etc).
@Joshua McGinnis those are our primary markets as we'll. we should talk and compare notes. We're always looking for deals
The type of investing I do is strictly on investing time and money into marketing for deals. I am not a buy and hold investor yet, and I am not a rehabber. I focus on investing money in finding motivated sellers. If you can do that the opportunities will be endless for you.
Finding deals is about finding motivated sellers which is a MARKETING CHALLENGE. In L.A. serious money is being spent by big players, so people are more likely to tune out your message, which adds to the challenge. Yes, you can do direct mail, which I like, but you can expect it to cost you $200 or more for each phone call. Same thing with web leads - a single CLICK can cost your $25 and each completed form $150+. I don't want to discourage you - just give you a quick reality check.
If you're just starting out and your budget is low, think about innovative ways to get your message out. Sponsor charity events where you can put up a booth. Make flyers and put them on cars at local sport events. Wrap your car or truck with an "I buy houses" message. Have door hangers made and walk neighborhoods with your kids putting them out... Just know that there are literally HUNDREDS of investors in L.A. who are competing against you. You challenge is to break thru all that noise and get noticed.
“You can adopt the attitude there is nothing you can do, or you can see the challenge as a call to action.” ~ Catherine Parker
You can buy foreclosure leads with phone numbers for less than $1 each. Call the people and ask if they want to sell - no brainer.
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