Every expert says that you make your money in real estate when you buy. What methods, tools (like MLS), etc. are out there to find these deals? Additionally, what processes do you recommend to qualify these "great" deals.
Hi @Jason Young ,
Good questions. To find great deals there are a variety of tactics you could use, but number one is talking. Tell everyone you know what you are looking for and what your goal is with the property, work it into the conversation as best you can. You never know who is holding a property that they can't wait to get rid of. What may be someone's constant headache could be your opportunity that you're searching for. Put another way, network with as many people as you can including RE agents (such as yourself). RE agents that also invest are great resources who can send you deals based on your parameters, which leads to your next question.
A great deal is one where you buy the property based on its current performance (actual cash flow). Actual current rent less real world expenses = cash flow. The great deal part comes into play when you can find ways to increase income and decrease expenses on the property. This will increase your cash flow. There are many many articles in the blog that go into detail, there are also quick rules of thumb like the 2% rule, 1% rule, etc. Also, different property types require slightly different ways of looking at things. For example, if you're talking about flipping then my above explanation doesn't apply! My experience is with buy and hold.
I suggest you check out the blog and search the forums for more specifics based on what you're trying to accomplish (single family rentals, multi family rentals, flipping, condo conversions, raw land, etc.).
Good luck and happy investing,
@Michael Germinario Mike thanks for the insight here. Networking seems to be a recommended best practice. Do you use any other tools (like MLS), or sites like listsource to identify prospective deals? Access to MLS is definitely helpful, but I want to make sure that i'm not becoming overly reliant on that one source of data. Thanks again!
@Jason Young find someone who doesnt want their property for whatever reason and solve there problem. I know that makes it basic but true, motivated sellers. One example is a list of all the condemned houses in your area and send them a letter.
Hi @Jason Young ,
Since I don't have access to the MLS, I rely on my RE Agent to bring me prospects. I would search the free sites like realtor.com and zillow when I was actively looking; but I suggest networking as your best practice. Again, leverage the talents of others who already know how to find great deals.
This may not be the answer you are looking for, but I hope that helps!
@Jeremy Tillotson Thanks for weighing in. Many of the podcasts and forum posts support what you are saying, so I think it's good advice. Try to create a win-win for both you and the seller by solving their problem and netting a solid investment. What resource do you rely on to identify these distressed properties and the associated owners?
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