So who is really buying the "investor specials" off MLS?

18 Replies

Before I get going let me make a disclaimer. I haven't done a deal yet and have only been in the game since January. So I'm still overwhelmed with all the info here.

As I look on redfin and realtor.com I see the Investor specials and attention investors homes. They have been on the sight for 120 days and some longer. I know this can't be a great deal or y'all would have snatched it up. So how really buys them?

Do you offer way under the asking price? Is it a fishing tool from sellers? Am I missing something?

Thanks

Stewart

(678) 588-2132

@Stewart Morrison , it depends on the actual house and the price.  Just putting "ATTENTION INVESTORS" in a listing doesn't mean a lot to me.  Sometimes, that phrase is used when the price is way too high for anyone, investor or owner occupant.  Other times the phrase is used when the price is more appropriate for owner occupants than investors.  

When I've seen the phrase used for houses that are accurately priced to sell quickly to investors, the houses (at least in my area) are getting sold quicker and quicker.  A couple of years ago, accurately (according to me) priced homes would linger on those sites for weeks and months, and were perfect for an even lower offer.  Recently, accurately priced investor houses are placed under contract within a couple of weeks to a month -- at close to list price, or even higher.  

Is the phrase a fishing tool when used with an overpriced home?  I don't know.  Maybe.  When I see a house targeted to "INVESTORS" that is overpriced, I just assume the agent is an idiot and doesn't know how foolish he/she looks.

If they've been on that long, the seller is probably pretty firm with the price and they're probably difficult to finance or they require cash.

It also depends on the type of investor.  Some investors prefer the higher end properties because they allow for a greater upward swing in price.  Most investors probably look at the middle of the road properties because they are in a decent location and likely offer the most stability.  Other investors like the low-end properties because they offer the most cash flow but also tend to have the highest turn-over and damages.

I've seen the post dealing with finding deals. But would it be safe to say most deals are purchased off MLS?

I get finding one before it ever hits the market is absolutely the best way but in reality most come from MLS right?

(678) 588-2132

@Stewart Morrison

In my area, most CL real estate ads are investor or pseudo-investor ads with true deals about as hard to find as they are on the MLS. Sure, you might find a deal once in a blue moon from either MLS or CL, but I prefer to spend my time fishing where the fish are hungry/biting instead of where they're not really hungry at all.

Originally posted by @Randy E. :

@Stewart Morrison , When I see a house targeted to "INVESTORS" that is overpriced, I just assume the agent is an idiot and doesn't know how foolish he/she looks.

Or the seller is a belligerent idiot and won't allow the agent to price it appropriately. I have seen plenty of those deals.

@Stewart Morrison -- Josh here, a fellow Atlantan in my first year of buy/hold investing. Great question. I find the ads with the CAPS often have numbers that just don't work for me. There are always exceptions, but generally, the louder ads seem not to be a fit for my investing.

I try to stick to this paradigm when searching for ads:

1) Understand my goals first. Answer this: what do I need my next acquisition to do for me?

2) Know my neighborhoods. Drive and walk the areas in which I hope to invest. Talk with neighbors, keep my eyeballs open for FSBO signs.

3) Follow ALL for sale properties in this area (favorite them using Redfin). Even if I have no intent to buy any of these listings, it is great to see the listings go pending and sold in real time, and it is fascinating to track the listing vs. sold prices and how long the listings were on the market.

4) As you develop a solid knowledge base, search for ads (MLS / Craigslist) in the area, and run the numbers yourself. Never trust the numbers in the ads. Even if it seems at a glance that a property is not for you, calculating the numbers is a good discipline that will make you faster at evaluating future properties.

I wish you all the best with your ventures. Cheers!

hi stewart. welcome to BP and welcome to real estate investing. being a " newbee", i am sure you are overwelmed with the information here. some of it you will use regularly and others, you may use little or not at all. so don't let the amount get you down. that being said, i personal think the MLS is one of the last areas i would look for deals. keep in mind that the MLS is created and managed by agents, and they are out to get the largest commission tat they can. lets face it, if you were the agent, you would want the most bang for your buck you can get, right? because of this, i think the home prices there are a bit high for the average investor. as investors, we want the best house and the lowest price possible. i find it much easier to drive around and look for houses that are obviously vacant. find out who owns them and why it is vacant, and if it is listed anywhere. your best deals are the ones that are NOT listed. sometimes finding the owner is as simple as asking a neighbor. sometimes you have to visit the local municipality and ask. they keep records of owners and sometimes records of the vacant houses in their area. this can be a great source for finding vacant houses. i personally have found houses that the bank started a foreclosure on and stopped, and gave the house back to the owners, who have long since moved on. these are great deals for pennies on the dollar. auction sites such as auction.com are good sources too. one motto i live by is " where there is one, there is another". go look at these houses listed by the municipality, or on auction.com and you will find another, unlisted house in the same neighborhood. happy hunting

On the mls Investor special is a polite way of saying CASH ONLY. 

property won't qualify for a tradional mortgage. 

I agree with those who have said the "deals" are everywhere.  

My first property was a house listed on MLS that I found on Realtor.com. My second was sold by the owner with no agents involved and no listing. My third was a tax foreclosure.

I don't ignore MLS/Realtor.com/CL/etc listings. I search any and every way I can think of. And I'm always adding new avenues to search by. In the end, I don't care how I discover a deal, I just want the deal.

True Story: A few weeks ago, I tried to buy a major rehab project.  It would have been by far the biggest rehab I'd done, but it also promised great returns.  My numbers would be tight (because the total I could afford for buy+rehab was limited) but I could make everything work if I got the property at a price that worked for me.  I lost that auction to a wholesaler who was buying the house for an investor, who spent $10K more than I wanted to spend.  Just a few hours ago, the wholesaler emailed me (we exchanged contact info after the auction) and asked if I was still interested in that house because her buyer backed out on her.  Unfortunately, I just bought another house and don't think I have the capital needed to complete the rehab necessary on the house she wants to sale -- not at the price she wants.  Now, it's a fair price, but I'm tied up right now.  Point is, that was yet another avenue for a deal.

It's a shell game out here.  The good news for us is, the treasure doesn't lie under just one shell.  Treasures are under all shells.

Originally posted by @Corey Demuth :
Originally posted by @Randy E.:

@Stewart Morrison , When I see a house targeted to "INVESTORS" that is overpriced, I just assume the agent is an idiot and doesn't know how foolish he/she looks.

Or the seller is a belligerent idiot and won't allow the agent to price it appropriately. I have seen plenty of those deals.

 Also a possibility.

Thanks everyone! like always tons of great insite!

Got a map,

Got a pen and pad,

Got gas,

Going for a ride! What a beautiful day in Georgia to ride around.

Lets find a deal

(678) 588-2132

"Investor alert" here means a) cash only b) property needs rehab and/or c) multifamily / hacked house

I've bought 9 properties and none of them had "Investor attention" or any wording like that on them.  Take that for what's its worth :)

My experience with many of these ads that say "attention investors" are properties that won't cash flow and have super low yields. I have had agents contact me with "deals" that aren't deals. Ads stating "attention investors" simply have catchy titles to get more views or to get uninformed investors to buy the property. This doesn't mean they are a good deal! 

John Thedford, Real Estate Agent in FL (#BK3098153)
239-200-5600
Originally posted by @Jean Bolger :

I think "investor special"  is sometimes just agent-ese for "too ugly for my retail buyers" ;)

 This matches my experience.  I've never been remotely interested in the looks of "investor specials" and the few times I've run the numbers on them, they're always worse than non-"specials".

You should read that as "non-investor specials" or "personal residence only with heavy rehab work required"

Buy from the source, not the MLS.

857-719-6846

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