I have a great realtor who helped me find the home I currently reside in & love in only a couple months. I have now reached out to her again to help me in the process of finding a foreclosure that would make a great cash-flowing rental property. However, after all of the books I have read & research I have done, it seems that most investors do direct mail marketing. My feeling is that by the time it is on Zillow, Redfin, etc. that it is already too late to get a great deal (as it has been seen by several investors already who clearly passed on it). I feel that I need to get some postcards sent out to homes in my area, and start doing some work myself to truly get a great deal. Do investor's primarily do the work themselves on finding those hidden gems? What is your opinion on this?
Thanks in advance!
I send out about 1000 cards per month. I also drive for $$. Also, I have my sister and a few friends text me pics with address of houses that look vacant. I track down owners and talk with them or send a card. I know some of the BIG BOYS send out 5k or 10k postcards per month. They must be getting several deals per month.
Results: I consistently purchase at least 1 home per month. I know that doesnt sound like that much, but I am bumping up the marketing and my goal for this year is 30 rehabs, but 15 would not be so bad either. If you are buying right, you will make 10-30k per rehab. The houses that I sell are usually in the 100k-150k range, so 15k net is the norm after realtor, closing costs, etc.
You do get the truly great deals by direct marketing for yourself.
@Dan Shelhamer Direct marketing is a pipeline sort of thing. You send out mailings month after month, a fraction will result in calls (leads) either right when they get your mailing or weeks or months later. A fraction of those leads will turn into deals either then or down the road after consistent follow up. Yes, the deals will generally be better than those on the MLS because of less competition and the savings to the seller from not having to list, but it is probably not the best way to go about getting one deal. You should reach out to wholesalers in your area who have a deal flow, as well as work the MLS.
No reason you can't do both. We buy a lot of stuff off the MLS, generally bank owned properties. A lot of times they slip through the cracks (although less now than during the crisis). Direct mail goes to people before they get foreclosed on. So by doing both you are looking at foreclosed properties and the properties being foreclosed on. If you add going to the auctions, you've got it all covered (at least as far as foreclosures go).
I think you should find realtors in your area that represent banks and investment companies with newly foreclosed REO properties. If you come in with an all cash strong offer immediately, they are generally very motivated to sell. Hope this helps.
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