Finding below market value properties and closing the deal
TX · Member since 2014 · 151 posts · 23 votes
I've been working with an re agent in hopes to find a property below market value with good investment potential to hold onto for a little bit then rent out. It seems that the really good deals, certain people have first dibs on them? Like whats the best approach in finding a deal? It seems that us investors are in a war with who is going to snag the deal first. Competition seems to make things that much harder...
@Sean Gallagher, I've been experiencing the exact same thing you have. Anything on the MLS seems to be priced to high to purchase (flip in my case) or if it is priced right, gets bid up by investors. I still get listing sent to me but now focus almost entirely on off market properties. I spend a lot of time generating and researching these leads, but the key is no competition from other investors. I haven't been doing it long enough to be 100% confident it is a sustainability business model, but it has worked out well so far. And I know there are others much more experienced on here that have used off market properties to build a sustainability business model. My plan is to head towards that direction.
Hope this helps.
Kyle
Few things come to mind.
First, are you working with a agent who is experienced working with investors?
What kind of perpetuity are you looking for. SFR, Multi under 4, Large Multi?
Are you looking for Turn key or something in need of Rehab?
In my area most of the really good deals don't last much longer than a couple hours on the MLS. From my experience it seems that they go to someones who have a inside track. If it was a perfect world, then all properties would be equally available to everyone, but that just isn't the case. Once I know exactly what you are looking for I might be able to offer advice.
@Sean Gallagher, I've been experiencing the exact same thing you have. Anything on the MLS seems to be priced to high to purchase (flip in my case) or if it is priced right, gets bid up by investors. I still get listing sent to me but now focus almost entirely on off market properties. I spend a lot of time generating and researching these leads, but the key is no competition from other investors. I haven't been doing it long enough to be 100% confident it is a sustainability business model, but it has worked out well so far. And I know there are others much more experienced on here that have used off market properties to build a sustainability business model. My plan is to head towards that direction.
Hope this helps.
Kyle
Well I'd like to capitalize on a homeowner who is in a tight spot and needs out, or has already been run out and their property was taken over by the bank. The property can need some repairs but I'm not looking to get too crazy as in replacing part of the roof or re-wiring the whole house. I typically prefer a newer property, some interior work and exterior work needed isn't too bad. I just want that good price to get me in a good spot. I guess the key would be to drive around and look for properties that seem to have vacated and catch it asap.
We are buy and hold investors who work with an agent. The key for us has been buying short sales. Right now with the crazy short sale market. They are turn off for many people. While some are not reasonably price you do get the one every now and than that makes sense. We expect for every 3 houses we put an offer on for only 1 to come back at the price we want. On the other hand we have been able to get the houses 5-20% undervalue with only limited work needing to be done.
The key with working with an agent is to make sure you have a GREAT one. Our agent in California has been the key to our success!
We are buy and hold investors who work with an agent. The key for us has been buying short sales. Right now with the crazy short sale market. They are turn off for many people. While some are not reasonably price you do get the one every now and than that makes sense. We expect for every 3 houses we put an offer on for only 1 to come back at the price we want. On the other hand we have been able to get the houses 5-20% undervalue with only limited work needing to be done.
The key with working with an agent is to make sure you have a GREAT one. Our agent in California has been the key to our success!
Yeah I will have to start making offers and hope one will get a bite while looking at comps in the area and the details of the short sale. The agent I'm working with is really nice, will have to get some more knowledge on their background in dealing with investors. I imagine an re agent who deals with many investors, its all about who can close the fastest. I have the money part, and now is finding the deal part!
Any luck with auctions?
I was told some properties foreclosed the people who get first dibs are those in not for profit organizations and federal. Odd
I would be very careful in saying your agent has to get more "experience" with investors. What are you asking your realtor to do? My realtors pure "goal" is to find me great deal in specific neighborhoods I am interested in. Nothing more, I do all the work. While we low ball, we also do't go down to 60%. We do about 80-95% depending on the house. We go as far as possible while still getting our offer accepted.
I feel like your strategy is going to be very difficult to pull off. You are looking for newer properties on the MLS that don't need that much work for substantially under market value... and so is everyone else. You are competing with Home owners, Buy and Hold investors & Flippers. Which means you are relying on mostly luck. Especially in a market that has been heating up. Very few people are going to drop their price in under 30 days & if their agents now they are looking to liquidate fast then it is already going to be marketed at a lower price to encourage a multi-offer situation.
Here are some thoughts.
Short sales are still selling at a discount, make a offer on every shortsale that comes up. Maybe one will bite. They can take a long time to accept your offer, which is why it is best to get a lot of them going at the same time.
Auctions properties are pretty good since your usually only bidding against other investors. There is usually a buyers premium so be aware of that when you buy
Consider direct marketing to owners. There are several Podcasts and articles written on marketing to motivated sellers. Great option since you are not dealing with a direct market.
Learn to evaluate a deal & search for properties yourself. Then make offers through the listing agent while offering them a double ended commission. This creates motivation on the listing agents part to close your deal. This wont work for deep discounts, but if you find a killer deal on the MLS is might work. I have yet to find a reason to work with the a buyers agent. They just slow you down and direct you towards deals that might not be the best in a attempt to earn a commission. Focus on the motivations of everyone involved and decide how you can use it to you advantage.