What is your go to method and/or tools for finding deals today?
Nate Slappey IIIPro Member
Realtor | Product Manager at BiggerPockets · Metro Detroit, MI · Member since 2022 · 119 posts · 127 votes
What is your go to method and/or tools for finding deals today?
Most Popular Reply
Member since 2022 · 20 posts · 39 votes
4yFind a property, any property that fits your strategy. This would be like distressed properties you want to use the BRRRR method on, or maybe you want a long term rental single family home. Run the numbers. For me, it comes down to 2 adjustable numbers: Down Payment and Purchase Price.
After factoring in taxes (from your local tax assessor property search), insurance quotes, available cash for down payment and closing costs, and what mortgage you would have from the purchase price, and variable expenses (vacancy, repairs, property management, capital expenditures), and fair market rent, you're left with your cash flow number. If it is acceptable to you for your effort, go with the deal. If it isn't, you have two numbers you can adjust: your down payment OR the purchase price. For me, I won't change my down payment. But I can change my purchase price and get a lower mortgage (with a over the mill interest rate, I use 7%) and drop the price until I get the desired cash flow. Even if that purchase price is way below listing, I'll still submit that offer. I'm going to get a lot of no's from everyone, and I'm sure they are going to get irritated with the lowballing. But like Brandon Turner says: "There is always a number that makes the deal work."
If I submit 100 offers and only get 1 yes, well then I have a cash flowing asset now. Rinse and repeat. Whether you're doing a BRRRR and calculating ARV and such, or looking for turn key LTR/STR, or multifamily properties, someone will sell to you for YOUR price.
Why would the sell to you? Well David Green says in his book, BRRRR, that there are many types of distress. Property distress is the most common reason for getting a deal, but there is also Personal Distress. I like to refer to them as the 4 D's: Debt, Disability, Divorce, Death. A seller may be selling to cover debt, for medical care costs or downsizing due to disability, house is sold following a divorce, or a family member passed away and the beneficiary/trustee needs to pay the estate debt, cover probate, or doesn't have the time/resources to handle the property. This is where I as an investor can come in and assume another person's liability and make a profit. If you knew that you would receive a yes after you've been told no 100 times, you would welcome the rejection because you are now closer to your deal. You would be excited to get through as many analyses to get to that solid deal.
63 Replies
- Real Estate Agent · Port Huron, MI · Member since 2021 · 43 posts · 37 votes4y
I don't have too much personal experience, but I think having a Realtor that is investor friendly would be a huge advantage! Even better if they have some skin in the game themselves. I think also having patience with how the market is because there are going to be some deals that you really want that just don't work out. Just my two cents from what I've learned from my readings and listening to podcasts.
- New to Real Estate · Cleburne, TX · Member since 2022 · 14 posts · 11 votes4y
Quote from @Andrew Vincent:
I don't have too much personal experience, but I think having a Realtor that is investor friendly would be a huge advantage! Even better if they have some skin in the game themselves. I think also having patience with how the market is because there are going to be some deals that you really want that just don't work out. Just my two cents from what I've learned from my readings and listening to podcasts.
I agree with you, Andrew. Having a good Realtor on the team definitely would be helpful. I have also have heard and read looking for off market deals, driving around the area for For Sale signs, looking for motivated sellers and networking helps.
- 4yBruce WoodruffPro MemberContractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
I am not currently looking (for a variety of reasons) but if I were, I would do what I always did.....drive around by myself for days, weeks, months...eat at the local taco shops, drink at the local bars.......find the neighborhoods that feel right, look right, smell right. (yes you can smell it). Find that line where gentrification is happening and where you think it is going to move. Buy a distressed house, the worst you can find. Make it beautiful, sell, repeat.
This is not to be confused with BRRR. R. R. or however many Rs they're putting there nowadays....
- Realtor | Product Manager at BiggerPockets · Metro Detroit, MI · Member since 2022 · 119 posts · 127 votes4y
Quote from @Andrew Vincent:
I don't have too much personal experience, but I think having a Realtor that is investor friendly would be a huge advantage! Even better if they have some skin in the game themselves. I think also having patience with how the market is because there are going to be some deals that you really want that just don't work out. Just my two cents from what I've learned from my readings and listening to podcasts.
I agree @Andrew Vincent. I think patience like you mentioned is something that unfortunately doesnt get talked about enough and is a huge factor in finding the right deal. I've usually seen people too impatient or too patient(analysis paralysis).
- Realtor | Product Manager at BiggerPockets · Metro Detroit, MI · Member since 2022 · 119 posts · 127 votes4y
Quote from @Hannah Howe:
Quote from @Andrew Vincent:
I don't have too much personal experience, but I think having a Realtor that is investor friendly would be a huge advantage! Even better if they have some skin in the game themselves. I think also having patience with how the market is because there are going to be some deals that you really want that just don't work out. Just my two cents from what I've learned from my readings and listening to podcasts.
I agree with you, Andrew. Having a good Realtor on the team definitely would be helpful. I have also have heard and read looking for off market deals, driving around the area for For Sale signs, looking for motivated sellers and networking helps.
@Hannah Howe networking definitely helps and if you don't have the network then finding a realtor who does will give you that extra advantage.
- Realtor | Product Manager at BiggerPockets · Metro Detroit, MI · Member since 2022 · 119 posts · 127 votes4y
Quote from @Bruce Woodruff:
I am not currently looking (for a variety of reasons) but if I were, I would do what I always did.....drive around by myself for days, weeks, months...eat at the local taco shops, drink at the local bars.......find the neighborhoods that feel right, look right, smell right. (yes you can smell it). Find that line where gentrification is happening and where you think it is going to move. Buy a distressed house, the worst you can find. Make it beautiful, sell, repeat.
This is not to be confused with BRRR. R. R. or however many Rs they're putting there nowadays....
@Bruce Woodruff i like this, I believe even with great technological solutions that does a lot of this already (except smell😂) there's still high value in doing some boots on the ground reconnaissance as i like to call it.
is it the market/economic conditions why you're not actively looking for deals right now?
- Member since 2022 · 20 posts · 39 votes4y
Find a property, any property that fits your strategy. This would be like distressed properties you want to use the BRRRR method on, or maybe you want a long term rental single family home. Run the numbers. For me, it comes down to 2 adjustable numbers: Down Payment and Purchase Price.
After factoring in taxes (from your local tax assessor property search), insurance quotes, available cash for down payment and closing costs, and what mortgage you would have from the purchase price, and variable expenses (vacancy, repairs, property management, capital expenditures), and fair market rent, you're left with your cash flow number. If it is acceptable to you for your effort, go with the deal. If it isn't, you have two numbers you can adjust: your down payment OR the purchase price. For me, I won't change my down payment. But I can change my purchase price and get a lower mortgage (with a over the mill interest rate, I use 7%) and drop the price until I get the desired cash flow. Even if that purchase price is way below listing, I'll still submit that offer. I'm going to get a lot of no's from everyone, and I'm sure they are going to get irritated with the lowballing. But like Brandon Turner says: "There is always a number that makes the deal work."
If I submit 100 offers and only get 1 yes, well then I have a cash flowing asset now. Rinse and repeat. Whether you're doing a BRRRR and calculating ARV and such, or looking for turn key LTR/STR, or multifamily properties, someone will sell to you for YOUR price.
Why would the sell to you? Well David Green says in his book, BRRRR, that there are many types of distress. Property distress is the most common reason for getting a deal, but there is also Personal Distress. I like to refer to them as the 4 D's: Debt, Disability, Divorce, Death. A seller may be selling to cover debt, for medical care costs or downsizing due to disability, house is sold following a divorce, or a family member passed away and the beneficiary/trustee needs to pay the estate debt, cover probate, or doesn't have the time/resources to handle the property. This is where I as an investor can come in and assume another person's liability and make a profit. If you knew that you would receive a yes after you've been told no 100 times, you would welcome the rejection because you are now closer to your deal. You would be excited to get through as many analyses to get to that solid deal.
- 4yBruce WoodruffPro MemberContractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
Quote from @Nate Slappey III:
Yes, although maybe not specifically for the same reasons as others. Some numbers would still work, but I'm just not feelin' it right now.....
- Lender · Alpharetta, GA · Member since 2021 · 34 posts · 36 votes4y
Pre-foreclosures, they are unlimited supply. There are tons of pre-foreclosures hitting the market every month, in most counties. The competition is a lot less than conventional real estate. You just have to figure out how to get to the homeowner.
- 4yJared HottleBusiness MemberReal Estate Agent · Cedar falls IA Waterloo, IA · Member since 2020 · 902 posts · 549 votes
I think the key is multiple strategies in order to keep a big funnel, word of mouth and relationships is big, meeting new people, properties on the MLS is huge and calling areas that you have interest in.
Jared Hottle Real Estate59 Reviews - Investor · Member since 2022 · 23 posts · 15 votes4y
Quote from @Vinnie Da silva:
Pre-foreclosures, they are unlimited supply. There are tons of pre-foreclosures hitting the market every month, in most counties. The competition is a lot less than conventional real estate. You just have to figure out how to get to the homeowner.
Awesome insight.
- 4yMike D'ArrigoPro MemberTurn key provider · San Jose, CA · Member since 2010 · 4k+ posts · 3k+ votes
@Nate Slappey III there's no one single source. I would definitely be establishing relationships with property managers. They are a good source for landlords looking to sell.
- Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes4y
Having multiples sources is key in todays environment. I deal primarily in distressed notes and have relied on people I have done business with in the past for 90% of my acquisitions. I will still network and continue to build relationships.
We have also brought on more staff to network and build upon their relationships. The power of compounding does not only worth with money but people and relationships as well
7e investments53 Reviews - 4yLuther Wilson IIIPro MemberReal Estate Broker · Kansas City, MO · Member since 2017 · 538 posts · 293 votes
It's been word of mouth & networking that's working pretty well for us lately. We're plugged in with several wholesalers, agents, and other investors. For whatever market you're investing in there's gonna be Facebook groups you can join - those have been okay too.
- Member since 2022 · 20 posts · 39 votes4y
Quote from @Emeka Attoh:
Quote from @Vinnie Da silva:
Pre-foreclosures, they are unlimited supply. There are tons of pre-foreclosures hitting the market every month, in most counties. The competition is a lot less than conventional real estate. You just have to figure out how to get to the homeowner.
Awesome insight.
Now I get it. This is why a lender should be part of your team. Lenders deal with the foreclosure side of real estate since they get you the loan in the first place. Trends with pre-foreclosures and foreclosures before they hit the market can be a great deal especially if the previous owner paid down the loan a significant amount.
I didn’t know this but after reading it, this just kind of clicked for me. Great information.
- Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes4y
Building relationships. Deals are sent to people sellers trust
- Member since 2021 · 6 posts · 7 votes4y
Quote from @Andrew Kennedy:
Find a property, any property that fits your strategy. This would be like distressed properties you want to use the BRRRR method on, or maybe you want a long term rental single family home. Run the numbers. For me, it comes down to 2 adjustable numbers: Down Payment and Purchase Price.
After factoring in taxes (from your local tax assessor property search), insurance quotes, available cash for down payment and closing costs, and what mortgage you would have from the purchase price, and variable expenses (vacancy, repairs, property management, capital expenditures), and fair market rent, you're left with your cash flow number. If it is acceptable to you for your effort, go with the deal. If it isn't, you have two numbers you can adjust: your down payment OR the purchase price. For me, I won't change my down payment. But I can change my purchase price and get a lower mortgage (with a over the mill interest rate, I use 7%) and drop the price until I get the desired cash flow. Even if that purchase price is way below listing, I'll still submit that offer. I'm going to get a lot of no's from everyone, and I'm sure they are going to get irritated with the lowballing. But like Brandon Turner says: "There is always a number that makes the deal work."
If I submit 100 offers and only get 1 yes, well then I have a cash flowing asset now. Rinse and repeat. Whether you're doing a BRRRR and calculating ARV and such, or looking for turn key LTR/STR, or multifamily properties, someone will sell to you for YOUR price.
Why would the sell to you? Well David Green says in his book, BRRRR, that there are many types of distress. Property distress is the most common reason for getting a deal, but there is also Personal Distress. I like to refer to them as the 4 D's: Debt, Disability, Divorce, Death. A seller may be selling to cover debt, for medical care costs or downsizing due to disability, house is sold following a divorce, or a family member passed away and the beneficiary/trustee needs to pay the estate debt, cover probate, or doesn't have the time/resources to handle the property. This is where I as an investor can come in and assume another person's liability and make a profit. If you knew that you would receive a yes after you've been told no 100 times, you would welcome the rejection because you are now closer to your deal. You would be excited to get through as many analyses to get to that solid deal.
Wow. Awesome read. Thank you. 1) Networking 2) SEO (including web page, social media, etc)
Both take time and effort to start and result in the deals coming to you.
do you know how many inquiries I get asking if I have interest in selling. What a waste of time. If they used the same effort to network or create a presence for sellers to find them their effort could produce on-going results.
Good luck
- Rental Property Investor · Russellville, AR · Member since 2014 · 688 posts · 509 votes4y
It varies by market (I'm in central Arkansas), but I am starting to see decent deals return to the MLS. I think some sellers are panic selling before buyers get priced out with rising interest rates. It's starting to get fun again!!
- Member since 2022 · 48 posts · 10 votes4y
@Vinnie Da silva what websites /apps are you using?
- Property Manager · Raleigh, NC · Member since 2014 · 729 posts · 596 votes4y
@Nate Slappey III
I have not been looking in today's market, which is probably a mistake. However, my best method of finding deals is talking to neighbors of properties I do buy. I have bought 3 properties just by being nice to the neighbors. I have also had offers from other neighbors but these never worked out.
- 4yPatrick DruryBusiness MemberReal Estate Agent · Columbus, OH & Cleveland OH · Member since 2021 · 1k+ posts · 2k+ votes
@Nate Slappey III
The best method for finding off-market deals is cold calling. - 4yJeff SchemmelBusiness MemberReal Estate Agent · Saint Paul, MN · Member since 2014 · 384 posts · 401 votes
@Nate Slappey III the best thing I do as an investor and investor-friendly realtor is to just build connections and help other people/investors out and treat that as my JOB. I take every opportunity to connect with new people, I tell everyone what I do, and I go to every meetup and dinner and beer dabbler and whatever that I can fit in. I still do that as much as possible to network with my sphere and keep growing it. I invest myself, and naturally, I try to do as many favors for other investors and clients as I can. I like to do those activities and favors, but they have a natural side-effect of building "social equity". Over time, I become the first phone call for people who know they can depend on me and who know I get deals done - they know I have a buyer or a seller. That's as complicated as it has to be for me, as I'm not trying to be some kind of mogul and build an empire and I have clients who need deals and want to grow their businesses.
I see people making bland social media posts like "looking for a deal", or "looking for off-market". Honestly, if you find one that way there's more than likely a reason it's not already spoken for. People work with others they know, like, and trust. All that said, you also are more likely to have to create a deal these days. A lot of MLS listings look pretty mediocre or even bad on paper, but over time, and with some work, they can cash flow and be a more attractive rental. I had to give one of my units a full facelift and knock out a wall to get the rent to the proper place, but there were tenants in there at below-market rent I had to be patient with first, and it took me a year to do that. now it's a 1% property and probably the nicest duplex in the neighborhood, but it didn't look that way originally. - 4yDon KonipolBusiness MemberInvestor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votesI don’t know that what worked in the past will work in the future. The landscape has changed with institutional buyers, ibuyers, instant and uniform access to information, Zillow placing all home listings on the internet, tons of cash floating around, lenders pushing money like dealers push drugs, etc.
Quote from @Nate Slappey III:
What is your best method, tool, resource for finding deals in todays climate? One of the biggest challenges I hear today from investors is finding deals (the right deals), what are you doing to overcome this hurdle?
So a ton of investors and wanna be investors, flippers, “wholesalers”, agents, brokers, and “middlemen” are chasing the very elusive divorce, death, foreclosure and general distress sale.
problem with this is twofold. One - many more people chasing the same number, or fewer potential deals. Two - People needing to sell because of “distress” situation have a lot more options to obtain closer to or right at retail market price. Brokers will buy the home, ibuyers will offer 94% of retail price, and your neighbors newly married son wants to buy in the neighborhood, and has no fear of buying direct from owner. Heavy competition indeed!
Now, a group of successful and potentially successful entrepreneurs have overcome these obstacles by setting up powerful web sites, employing SEO, SEM, social network marketing, PR strategies, hosting Facebook groups, and spending $10,000 monthly to advertise/market their business. So where does that leave the parties investor looking to find their next deal, or expand their real property portfolio?
Well, the investor CAN just accept paying “full price” and receiving a “market rate of return”. And moving from residential to commercial SHOULD result in a higher rate of return IF the investor becomes knowledgeable in commercial real property. However, this is probably a better strategy for the already wealthy rather than those trying to become wealthy. To become wealthy one needs either GREAT deals, or aggressive expansion of real estate portfolio.
A creative approach that has worked exceedingly well for me for the last 40 + years has been to seek good properties - good locations, in demand, well positioned, solid structure (good bones), but that has been mismanaged or in need of a change of positioning. Think commercial single user owner occupied turned into four or five tenanted property; empty big box retail space made into mini storage; single family home on busy street turned into restaurant/bar/boutique, storefronts in downtown turned into live/work lofts, etc. The investor should aim for an overall 20% return on these projects; utilizing 50% financing can increase cash on cash return to the 30% range; and if the deal is large enough syndicating it can put the return into the arena where wealth can quickly accumulate.
As an aside, it has been my experience that most investors who think about syndicating a real property deal seem to be of the mind that they want to invest no, or limited amount of their own capital and can achieve this through syndication. A MUCH better use of real estate syndication is where the sponsor invests a SIGNIFICANT amount of capital himself and utilizes the “promote” for putting, managing, finding and administering the deal to enhance his ROI into triple digits. But that a whole other post.
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