Investor · Plano, TX · Member since 2020 · 22 posts · 13 votes
Two years of aggressively paying down debt and cleaning up our credit and we finally got approved for an FHA mortgage! We want to use the loan to buy a multifamily property, but the market is still really hot in area. Any ideas on where to start?
Try looking on Craigslist and Facebook Marketplace for properties that are "For Sale by Owner." Since those properties don't hit the MLS, there are fewer people looking at them. Loop.net is good for commercial properties, and sometimes, small multifamily gets listed there. You may also want to post an ad on Craigslist describing the type of property you are looking for. If people know that there isn't an agent involved, they might jump on that opportunity since it nets them more out of pocket in the end. If you go down that path, spend some money to have an agent or lawyer review the paperwork to make sure everything is in line.
Another option to consider is to drive through the neighborhoods you want to live in and scout out properties you would be interested in. Send a letter to those addresses and ask if they would be interested in selling. That's also a great way to find distressed properties to get a deal on. You'll just need to be prepared to do some work after the purchase.
If you look for houses with more bedrooms, say a 4 or 5 bedroom house, you can rent out the additional rooms and make some money that way. Larger square footage may also be dividable in a way to create multiple living spaces. Just be careful here as you need to comply with neighborhood CC&Rs as well as city codes.
Talk to multiple realtors to see if any of them have any "pocket listings" or know anyone who is considering selling, but hasn't made the decision to list. That means you have to be open to working with a realtor that might not be your preferred realtor.
My last suggestion is to talk to local wholesalers. They do a lot of work finding deals, so instead of doing that hard work yourself, let them find you something. Wholesale properties will need work, so be prepared for that. This is probable the best way at finding under market deals that you can add value to and put your own finishing touches on.