Searching for properties... methods?

18 Replies

Okay what are some good systems for searching for deals? I'm looking to buy ASAP as soon as I find the right deal. But I'm getting bogged down looking through MLS listings and zillow.

The way I do it right now, I look through my most recent MLS updated listings, if I see something that looks promising I type it into zillow and compare to comps by price per square foot. If it's not at least 20k - 30k under value I move on.

Keep in mind, my strategy is to move (along with the roomates that live and rent from me), sell my existing house, and live in the new one for 2 years then sell that one.

I know this is kind of a general, broad post, but just seeing if anyone has any input, or ideas how to get access to more access (ie. foreclosure listings or something that not everyone and their mother has access to like the MLS.

Thanks guys!

Asher-thanks for posting this thread. I am wondering same thing. I know it takes awhile to find the "one", but how else are people finding properties that are these amazing deals left and right?!

There are lots of ways to find deals other than the MLS

Pre-foreclosure
Vacant houses
code violations
rent court
Fire
burnt out landlords
delinquent taxes
auctions
FSBO
Craigs list
wholesalers
Absentee owners
out of state owners
Probate
Bankruptcy
Direct mail to any of the above.

but how else are people finding properties that are these amazing deals left and right?!

Nobody is finding deals "left and right." which implies it is easy. Finding great deals is hard work.

Also most great deals aren't "found" they are negotiated.

Good luck - Ned

Ned said it well, if it were that easy everyone be doing it. It takes time and eats profits.....With practice it gets easier.

Question: How is Zillow stacking up to the MLS as far as comps(zestimate) ?

Thanks for the advice Ned. And yes, I understand its not easy. I'm willing to put in the time, I just want to be searching in the most efficient way possible.

I feel like the zestimate is getting better. I look at it as a very general starting point, and then validate with comps. But I feel like it's more accurate than it was 2 years ago.

@Asher Another way to go about this would be to just start talking around to people in the real estate world and even friends. People know people. Friends of mine (one a realtor, one just a individual) brought me friends they had they needed to sell a property ASAP. Because we didnt have a realtor, these people needed out quick, and the properties needed some work, I was able to get them 25% below value. Many offer finders fees

Another thing to remember is that properties dont tend to be sitting on MLS much below their value if you include the price of repairs... well at least not in my area. This doesnt mean that you cant find a deal through MLS, you can. What I have found is that I have to make offers. Some may feel like it a low ball offer, but its not. Sellers can be very unrealistic about their price. However once they have sat on MLS for 120+ days, they often find their motivation.

Keep hunting. Talk to everyone you can. Never give up. You will find it.

I am curious on your two year hold idea, are you hoping to gain value as the markets rise? Will you be doing work to the house while you live in it? Personally I feel that two years is a short hold time for appreciation unless we are in an unnatural market like the mid 2000s were. Would you consider holding the property and renting it out if you are not buying a flip property? I am no expert in this industry but it seems like you will be paying a lot of transaction costs that eat away at any money you might make. I am an expert on that however. I am an active trader and I know what fees and transaction costs do to your profits.

Originally posted by Terry P.:
Ned said it well, if it were that easy everyone be doing it. It takes time and eats profits.....With practice it gets easier.

Question: How is Zillow stacking up to the MLS as far as comps(zestimate) ?

Well lets put it this way. It's like comparing dog sh!t(Zestimates) to a hot fudge sundae(MLS).

Originally posted by @James Hiddle :
Originally posted by Terry P.:
Ned said it well, if it were that easy everyone be doing it. It takes time and eats profits.....With practice it gets easier.

Question: How is Zillow stacking up to the MLS as far as comps(zestimate) ?

Well lets put it this way. It's like comparing dog sh!t(Zestimates) to a hot fudge sundae(MLS).

James Hiddle

Makes me wonder if Zillow has some human or program error in certain regions. I don't have MLS yet, but I use it and the county tax valuation which is normally low, and I figure houses on the market are about $5-10K high. When I finally due get the comps from an agent they are pretty in line with that I figured. Like the OP Zillow is not that far off in my area.

But yeah I'm doing about the same thing as the OP. Hard to find deals.

I still wouldn't trust Zillow even if it weren't off by much. I'd prefer the MLS above anything.

@James Hiddle

Obviously we all know you get what you pay for in life and MLS does not come cheap. I say all the power to sites like Zillow and I hope that lots of folks visit their site so they get more sponsors, so they provide more accurate info so us REI don't have to buy MLS when some of us have no interest in selling RE for living. It is also nice seeing Flat Fee selling services emerge recently for the same purpose. :)

If you pay attention to some blogs and post by good appraisers they use several data points, not just MLS.

We figured out some time ago that the flaw in Zillow's Zestimate algorithm is its problem when the market is moving (either direction) fast.

In a fairly static market, the info isn't too bad, but how often is the market stabile?

Originally posted by Rick Harmon:
We figured out some time ago that the flaw in Zillow's Zestimate algorithm is its problem when the market is moving (either direction) fast.

In a fairly static market, the info isn't too bad, but how often is the market stabile?

Interesting, you'd think the IT weenies figure out how to move data faster, when they do the power of Zillow will be unleashed. MLS you're toast! ;)

Or,

"It's like comparing dog sh!t(MLS) to a hot fudge sundae(Zillow)".

:)

It's not the Zillow IT smarts, it's the county recorder's updates to info that drags in many areas, where the county does an annual update; although Zillow only does quarterly updates in some places where the county updates much faster than that, so the Zillow data will lag the market there too. All Zillow has to do is mine some of the recent sales from realtor.com to get the more timely updates ...

Originally posted by Steve Babiak:
It's not the Zillow IT smarts, it's the county recorder's updates to info that drags in many areas, where the county does an annual update; although Zillow only does quarterly updates in some places where the county updates much faster than that, so the Zillow data will lag the market there too. All Zillow has to do is mine some of the recent sales from realtor.com to get the more timely updates ...

There we go Steve is making sense! :)

here the county is spot on little low or on the money with MLS in this low ball market even bankers I am finding use it as a first look see.

Yeah there data is only good as the data they draw on, a algorithm prob as stated.

I was curious about the two year thing too. Are you planning on profits and thus the section 121 exemption? That is a good idea but first there needs to be profit.

When I first entered the real estate business as an agent (had been investing for 10 years) we would advise buyers that were likely to be transfered in a couple of years to rent instead of buy, because that was the break even point in a basically normal market.

So unless your market rises more so what good is it unless you buy at the right price. I can see your probably expecting rents to allow you to live free, so maybe that is the plan and breaking even would still benefit you.

Originally posted by Brian P:

So unless your market rises more so what good is it unless you buy at the right price. I can see your probably expecting rents to allow you to live free, so maybe that is the plan and breaking even would still benefit you.

In general, the methodology here is to buy a distressed property at a price that provides immediate equity upon purchase, just like if you were planning to flip the property. The difference being that you live in the house for 2 years, spend that time fixing it, and then sell and not have to pay taxes on any profits.

Again, no different than a flip, but you occupy the home for 2 years before selling to avoid taxes. The risk is obviously that the market drops during those two years, but even if the market stays flat, the strategy works. And in the best case, you get some appreciate during the hold period.

I agree with you that the strategy doesn't work if the property is not purchased at a discount, but I assume the OP plans to buy something with equity.

OK now what your planning to do makes sense, and I know several grads that did just that.

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