How are you finding deals?

[Kyle Hoppman]

Hi all, how is everyone finding deals right now? I have a property for sale under contract currently that I'll be doing a 1031 with. I should walk away with around 250k from this sale. I have been searching the MLS for weeks and haven't found anything that makes sense. How is everyone find properties where the numbers make sense? I'm not sure I want to mess with off market, but maybe that is the best route to go. Thanks in advance.

[Kevin Sobilo]

@Kyle Hoppman, a couple thoughts:

1. You don't FIND a deal, you MAKE a deal whether its on the MLS or not.

The prices on the listing are asking prices, depending on the circumstances and motivations of the seller you might negotiate something more favorable. So, virtually EVERYTHING is a potential deal at the right price. 

Have you looked for distressed or motivated sellers or unmotivated listings agents? You might find a seller with a bad tenant situation keeping them from making a sale. Or someone whose agent is sort of AWOL on working the listing or whatever. Many situations can give you an opportunity to negotiate something favorable. 

2. In addition to #1, there are more ways to "make a deal". You might make the deal work after closing by doing "value add" work. Perhaps you buy a 6 unit property and separate utilities or replace the heating system to lower expenses thereby causing your appraised value to jump allowing you to refi out more money later or to make better cash-flow or both. 

3. Why be hesitant about off-market deals? They can be more gainful because there less middle-men (agents) taking a cut.