Advice for Working with Agents in a Crazy Market?
I've been reading J Scott's books and the BP forums and almost everyone recommends finding a real estate agent early in your investing career that can help you out by pulling comps, finding listings, etc. My question is: is it worth doing this in a crazy market like the San Francisco Bay Area? By crazy I mean extremely low inventory, houses going 10 - 25% over list, lots of cash buyers, etc.
Real Quick - a little about my strategy. I'm currently doing direct mail campaigns trying to find motivated sellers directly. I've sent out over 2,500 letters without a deal yet, but I'm confident in my system. My primary exit strategy is either to wholesale (if its a major rehab or outside my desired farm area) or flix and flip (I have friends and family that would be potential investors based upon the deal). Furthermore, I'm currently enrolled in a community college to get the education requirements done for my RE license. I anticipate taking the test in the July/August time-frame.
I've been doing these mailings since mid-January and I'm trying to find ways to shorten the time to my first deal. The first thought was to work with an agent to find available properties, but then I got to thinking about how crazy the listing are out here. So now I come to BP Nation with open arms asking for advice. What would you do in my situation?
A) Continue trying to find "off-market" opportunities
B) Call and interview agents that can help me find a house on the MLS.
Most Popular Reply
Brandon Foken - why not do both?
HOWEVER, I wouldn't just go with ONE agent (not in this market anyway). Call, and market yourself to RE agents. See if they have any new listing coming up on the market (short sells work well). Call on listings that have been "pending" in the MLS longer than a month. Call all the agents who have a listing as "contingent" see if anything is going to fall out. You may also want to consider other type of inventory - condos, town homes for your mailers. SFR may be saturated with direct marketing, but condos and townhomes may be an untapped market (just an idea).
I'd also consider calling up craigslist "for rent" adds. Look for ones that are posted by a "mom n pop" outfit and not a mgmt company, see they'd be interested in selling.
Call up a few mgmt companies and let them know you offer a referral of X amount of dollars if end up purchasing a home from a referral they gave you. They would know better than anyone else which house has "problem tenants" or which building owner is ready to quite, etc.
You may also might want to consider marketing to mortgage brokers to see if they had to decline financing a property due to the condition of the home. Same deal - offer to pay X amount of $ toward their marketing costs if they refer someone to you.
I hope that helps! I'm currently doing all of these and I closed on one pocket listing this month and I'm *possibly* getting an Owner carry back from one of my mailers (I'll know on Sat).
Keep shaking the leaves and something will fall eventually. My point is simply that you have to be the one taking it to these RE professionals. They are all swamped and are quick to forget 1 phone call.
I hope this helps.
AG