Keller, TX · Member since 2015 · 11 posts · 1 vote
As a beginner in a hot market such as Tarrant County and Dallas County what are people's strategies on finding deals!
I want to direct mail 5k postcards, find the return addresses, than 5k yellow letters to the same homes via listsource.com. These list include absentee owners and probates..
I literally have found yellow letters on the ground just walking in neighborhoods! It's crazy how competitive this market is!
I'm also competing against cash buyers! I have lined up a 30 year fixed mortgage so MLS and auctions are not reliable.
Any advice on how people find deals in this market will help TREMENDOUSLY!
Thank you thank you thank you!
Ideally I want to use the buy n hold strategy on a multi family home but at this point any deal that generates positive cash flow will work!
Have a buddy whom walks a target neighborhood speaking to everyone on behalf of a local politician he works into the conversation he has people looking to buy in the area do they know anything vacant or coming up for sale he pays for any referral he buys.
That is a huge cash investment compared to the likelihood of finding a deal...From my experience in Dfw, wholesale deals are a lot of time and money investment for a small pool of possible deals. By comparison you could probably save up a down payment in less than a year, come back on BP and find a turnkey which will be much more likely to succeed, imo. It seems to me that an investing strategy should change depending on market conditions, and in a market where people are bidding houses above asking price, wholesaling will be quite difficult. I'm not an expert though.
A friend and I were considering doing some direct mail for the purpose of flipping but reconsidered after seeing the saturation of the market in DFW. We're now taking a networking approach with different wholesalers, finding a good agent, and just letting people know what we're looking for. So far it's working pretty well. We're just about to have our system to set up to receive the deals but have had a few good ones come up this way.
If direct mail is your decision, I would think marketing to a very, very specific target would be your best bet.
I'm also not an expert but this is what I've been seeing from others here about direct mail in DFW. @Hattie Dizmond always has some great advice on this sort of thing!
As a beginner in a hot market such as Tarrant County and Dallas County what are people's strategies on finding deals!
I want to direct mail 5k postcards, find the return addresses, than 5k yellow letters to the same homes via listsource.com. These list include absentee owners and probates..
I literally have found yellow letters on the ground just walking in neighborhoods! It's crazy how competitive this market is!
I'm also competing against cash buyers! I have lined up a 30 year fixed mortgage so MLS and auctions are not reliable.
Any advice on how people find deals in this market will help TREMENDOUSLY!
Thank you thank you thank you!
Ideally I want to use the buy n hold strategy on a multi family home but at this point any deal that generates positive cash flow will work!
Jeremy,
Welcome. It's tough finding deals in our market. If you're doing 2 sets of 5k postcards each, you're going to spend $4-5K, depending on your list criteria, with no guarantee of finding a good match. Every property I walk into off my direct mail has met with multiple "We buy houses" folks, and it seems like a lot of them are willing to pay more than I think a place is worth, just to secure a deal. I've still been able to secure some deals, but it's very competitive. And, of course, anything on MLS is bid up crazy high.
Foreclosure auction is a decent place to find deals, but you have to pay cash. And even there, it's common to see occupied houses where you have to evict a tenant and where you don't know the interior condition being bought sight unseen for 70-80% ARV.
Boyd's suggestion of a turnkey property is not a bad deal, if you don't want to self-manage. If you do want to self-manage to get that experience and save $100/mo or so, I usually some houses in my portfolio I'm ready to sell off. I renovate, rent, hold for a couple of years, take some appreciation and do it all again. They're not gonna be dirt cheap, but cheaper than most turnkey deals. I've got 20 properties in my portfolio right now. I'll sell a few of those and buy 15 more this year. Three I'm ready to sell are in good repair, all have long-term tenants, and all would meet the 1% rule. Send me a PM and we could discuss.
That is a lot of up front cost for direct mail, especially if you are just starting out. I don't mail much anymore, due to the fact most sellers are getting at least 5-6 letters a week from investors in Tarrant County, or across the DFW Metroplex--it's very saturated. If you can be patient and network your way to a deal, that may save you some money.
Direct mail takes time, commitment, and a significant investment. Done right, it can produce a decent ROI.
Another strategy I think you should consider is GOOGLE SEARCH (AdWords) advertising.
All you need is a landing page from someone like Investor Carrot and you can set up and run an AdWords account that will generate leads at a lower cost per lead than direct mail.
Leads from Google tend to be more competitive because people will fill out several forms to create some competition. That's why it's super important to call someone within minutes of them clicking the submit button on your landing page. But what's great about AdWords is you can easily track your spending and cost per conversion.
One warning if you do AdWords.... Once you set up an account, Google will start to SUGGEST NEW KEYWORDS for you to add to your campaign. NEVER TAKE THEIR SUGGESTIONS - they are only intended to increase their revenue, not your ROI.