Finding "good deals" using the MLS
Real Estate Professional · Wesley Chapel, FL · Member since 2017 · 17 posts · 2 votes
Finding "good deals" using the MLS
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Rental Property Investor · Claremont, CA · Member since 2015 · 292 posts · 374 votes
9yI have had access to the MLS (have my license) but found that I can pretty much find properties just as easily using Refin. Here is how I do it:
- I search for an area that I am interested in by zooming the map in on it.
- I use the $/sqft column and search by the LOWEST number first. You do this by clicking on the top part that I highlighted in yellow, it will show the arrow pointing up or down. You want LOWEST at the top.
**Generally you will get 2 types of properties here - really big homes that are expensive or really run-down properties that are selling for cheap. I keep my eye on the price as I scroll down the low $/sqft part of the list and when I see something that looks out of place, like a $200k property when everything else is $600k+ then you have a good candidate**
- Next I will click on the price at the top to bring the cheapest properties to the top and see if anything looks out of place there.
By using these two filter methods, you will pick off homes that are listed either at a good value relative to the size of the house OR you will find the cheaper homes in area. Cheap doesn't mean it's a good deal, but I've never seen a good deal that was listed at the highest price point in the area.
Also, please keep in mind that these prices are STARTING POINTS so do your research, find out if homes in your area are going for below asking price or above. In my local area, most properties are being bid up well over asking price so if you try to offer at or below asking, the selling agent will ignore your offer.
A final note, you can also filter deals by the age (Days on Market - all the way to the right side) and find stuff that has been sitting there. This is where getting in touch with the selling agent or having your agent reach out can come in handy. Sometimes you can find a deal because the seller needs something specific to happen that scares away most buyers. A perfect example of this is a 1031 exchange clause: The seller wants escrow to be 4 - 6 months OR until he finds something else to buy. Most people don't want to deal with this, so they ignore and move on. Certainly an opportunity for you (investor) to solve the problem and make a deal.
Hope this helps!!
48 Replies
- El Cerrito, CA · Member since 2015 · 257 posts · 129 votes9y
I've never had access to it but can you search for properties that have been on the market for X number of days? That could be a start?
- Real Estate Professional · Wesley Chapel, FL · Member since 2017 · 17 posts · 2 votes9y
@Doug Woodville , yes I can search for expired listings. How do you find deals without MLS access?
- Rental Property Investor · Miami, FL · Member since 2017 · 2k+ posts · 911 votes9y
Tons of deals on the MLS. Set your searches in your zip codes for your criteria of projects. Analyze deals and they come in. Wait for them to come to you.
- El Cerrito, CA · Member since 2015 · 257 posts · 129 votes9y
You can start a "yellow letter" campaign and mail houses you've either found yourself or you can purchase lists from different sources. Try searching "yellow letters" and the BP search engine will provide you a bunch of info.
You could also call homeowners, door knock, networking with wholesalers (or anyone into RE) etc.
- El Cerrito, CA · Member since 2015 · 257 posts · 129 votes9y
Oh, you can't forget pre-forclosures and REO's.
- Rental Property Investor · Claremont, CA · Member since 2015 · 292 posts · 374 votes9y
I have had access to the MLS (have my license) but found that I can pretty much find properties just as easily using Refin. Here is how I do it:
- I search for an area that I am interested in by zooming the map in on it.
- I use the $/sqft column and search by the LOWEST number first. You do this by clicking on the top part that I highlighted in yellow, it will show the arrow pointing up or down. You want LOWEST at the top.
**Generally you will get 2 types of properties here - really big homes that are expensive or really run-down properties that are selling for cheap. I keep my eye on the price as I scroll down the low $/sqft part of the list and when I see something that looks out of place, like a $200k property when everything else is $600k+ then you have a good candidate**
- Next I will click on the price at the top to bring the cheapest properties to the top and see if anything looks out of place there.
By using these two filter methods, you will pick off homes that are listed either at a good value relative to the size of the house OR you will find the cheaper homes in area. Cheap doesn't mean it's a good deal, but I've never seen a good deal that was listed at the highest price point in the area.
Also, please keep in mind that these prices are STARTING POINTS so do your research, find out if homes in your area are going for below asking price or above. In my local area, most properties are being bid up well over asking price so if you try to offer at or below asking, the selling agent will ignore your offer.
A final note, you can also filter deals by the age (Days on Market - all the way to the right side) and find stuff that has been sitting there. This is where getting in touch with the selling agent or having your agent reach out can come in handy. Sometimes you can find a deal because the seller needs something specific to happen that scares away most buyers. A perfect example of this is a 1031 exchange clause: The seller wants escrow to be 4 - 6 months OR until he finds something else to buy. Most people don't want to deal with this, so they ignore and move on. Certainly an opportunity for you (investor) to solve the problem and make a deal.
Hope this helps!!
- Real Estate Professional · Wesley Chapel, FL · Member since 2017 · 17 posts · 2 votes9y
@Antoine Martel - That makes perfect sense...I setup searches for Buyers all the time- so I will definitely do this. Would you share the specific criteria you put in your searches? @Doug Woodville yes, I am familiar with direct mail campaigns. I will probably start with a door knock and if unable to make contact I will do searches for the owner address (if different from the property address). I'm really excited to start investing! When it comes to pre-foreclosures and REOs, I just want to make sure there aren't any major pitfalls that I need to be aware of. @P.J. Bremner thats genius! Lol, I'm very methodical in my way of doing things- therefore, once I find a process that brings good results I will simply repeat that process for eternity :)
- Rental Property Investor · Claremont, CA · Member since 2015 · 292 posts · 374 votes9y
Me too! I'm somewhat OCD so I like to parse a map into sections and just go section by section, $/sqft first looking for oddball prices, then price next, then onto the next section. Once I have a whole map covered, I only have to look at the map once or twice per day to see if anything new popped up (on Redfin, light green means you clicked on it already. Dark green means it has not been looked at yet) so I just click on everything to "clear the map". I could set up email alerts to do this as well, but personally I like to manually look so I know exactly what is going on in the area.
For me, every single listing on the market is of value - it is either a deal to purchase, a retail ready property that helps you price your flips, or a perfect example of what NOT to do lol (that 300+ DoM property that the owner begrudgingly lowered the price after it sat too long and is now unwanted inventory).
- Real Estate Professional · Wesley Chapel, FL · Member since 2017 · 17 posts · 2 votes9y
@P.J. Bremner..I think we have some common characteristics :) When you found your first property- I'm sure you used the 70% Rule to analyze the deal- right? Then you just jumped in- reached out to inspectors and a GC and made a flip happen? I think the biggest obstacle is getting over the fear. But I'm borderline fearless in some respects- my only real fear is not getting a return on my investment . Can you tell me a little bit about your first flip and how you moved forward? Sorry to pick your brain- I'm just really curious.
- Rental Property Investor · Claremont, CA · Member since 2015 · 292 posts · 374 votes9y
My first few properties were buy and hold that I still have, used them for student housing. I was looking for huge homes that had a ton of rooms and were run down - it's a perfect combo because nobody wants a 6 bedroom house with 2,500 sqft that is a dump lol so I was getting stuff for like $100 - $150 / sqft in 2012 - 2014. These same homes now sell for over $200 / sqft so things definitely change. I've found several properties on the MLS that would have worked as a flip, toured the house and made offers but always got outbid (to the point where there is no profit to be made unless I rehab by myself). I've recently started looking out of state and employ the same search method and it's already netted me 2 deals this month : )
For the local deals, I would go to the house myself and since I've done about $250k worth of rehab work on my own properties, I generally know what it will cost with my team. For the out of state stuff, I have a local GC that walked the property for me and gave me a bid. I can keep him in check because I know roughly what things should cost. Very important for you to get that experience, just being around rehabs will help a ton.
Flips are tough in the areas i've been looking because it's super competitive and my direct mail pieces didn't result in any flips (got a good listing or two so still made some ROI on the mailers). My personal opinion - buy and hold is a lot less scary because the numbers are much more steady. If you go over your rehab a little on a buy and hold, it's not the end of the world. On a flip, it can be devastating.
My best advice is to try to partner up with someone that knows what they are doing. If you have access to cash, either your own, other's or credit, then you should be able to find people doing it that will partner with you. Follow them around, learn everything you can about the rehabs, what needs to be replaced, what to ignore, what things cost, how long they take, what order things need to be done in, how to keep contractors in check, etc. So much to learn, adding the stress of doing all of this on your own seems like a mistake for most people. Partnering is a very logical choice. I'm actually meeting with a flipper this Thursday for a possible partnership. We will see!
Finding a partner: ask for it on BP forums, go to local REIA meet-ups, contact flippers directly (direct mail list, find people buying stuff cash and reach out to them), etc.
- Atlanta, GA · Member since 2017 · 11 posts · 10 votes9y
The best way to find those deals is to hit the streets Jennifer. You need to drive your farm area and look for properties that look like they are in distress. Look up the owner's contact info online and send out your letters. I find that when folks stop spending money on the upkeep, that's the first sign.
- Rental Property Investor · Miami, FL · Member since 2017 · 2k+ posts · 911 votes9y
Originally posted by @Jennifer Brown:
@Antoine Martel - That makes perfect sense...I setup searches for Buyers all the time- so I will definitely do this. Would you share the specific criteria you put in your searches? @Doug Woodville yes, I am familiar with direct mail campaigns. I will probably start with a door knock and if unable to make contact I will do searches for the owner address (if different from the property address). I'm really excited to start investing! When it comes to pre-foreclosures and REOs, I just want to make sure there aren't any major pitfalls that I need to be aware of. @P.J. Bremner thats genius! Lol, I'm very methodical in my way of doing things- therefore, once I find a process that brings good results I will simply repeat that process for eternity :)
I look for single family homes over 900 sq ft with 3 bedrooms or more under a specific price.
- Real Estate Professional · Wesley Chapel, FL · Member since 2017 · 17 posts · 2 votes9y
This information in invaluable everyone! I really appreciate it & @P.J. Bremner I see BIG profits in your future!! ;-)
- Investor · Orange County, CA · Member since 2015 · 2k+ posts · 3k+ votes9y
Readily apparent good deals show up on the MLS from time to time, even in a hot market ... the key is speed to get your offer in fast and lock it up before your competition does.
There are two other ways that I'm aware of to get good deals off the MLS, one which is unscrupulous IMO and the other that takes some vision.
1)The unscrupulous way: you bid the property at or close to asking price, with no intention of closing at that price. Then you work the inspection to try to retrade the deal in escrow to a price you want, and then walk away if you don't get it. Essentially this takes an on market property and attempts to turn it into an off market deal after it is in escrow. Please don't do this, but if you are an agent you need to be aware in order to protect your sellers from such strategies.
2)The visionary way can be summed up in 2 words: hidden value. It is basically being able to spot situations where the property isn't currently at its highest and best use. An example would be a small 2 BR property on a large lot surrounded by huge 4 BR properties. Take a property like that, on the MLS, pay market value even for its current state, and unlock the hidden value by adding beds and baths in a cost effective manner (converting attics and/or basements, converting the garage and then adding a detached garage structure, etc). It takes some work and some vision to see things that others miss because they aren't looking for it in this way, but you could pay retail and actually still make a profit by spotting and extracting this sort of hidden value. Many more examples, like logging the trees on a property and selling the wood like @Jay Hinrichs used to do, or breaking up the lot into parcels and selling them off like he currently does ... any other examples, Jay? I think you may be the BP master on such techniques :)
- 9yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
@David Faulkner the timber play is a rural lands play and the MLS can be your happy hunting grounds.. but first you have to understand timber.. and how to value it and how to log it etc etc. so probably very narrow niche; for certain and not something most folks that are geared towards rentals would ever look to do or understand.
now creating another building parcel that's quite common on MLS my wife sent me one a few hours ago right on MLS. But again most folks that are rental geared simply are not interested in this facet ... as it tends to be quite capital intensive and not really all that great in the leverage department.. cash buyers well they have a leg up ..
- Investor · Orange County, CA · Member since 2015 · 2k+ posts · 3k+ votes9y
Originally posted by @Jay Hinrichs:
@David Faulkner the timber play is a rural lands play and the MLS can be your happy hunting grounds.. but first you have to understand timber.. and how to value it and how to log it etc etc. so probably very narrow niche; for certain and not something most folks that are geared towards rentals would ever look to do or understand.
now creating another building parcel that's quite common on MLS my wife sent me one a few hours ago right on MLS. But again most folks that are rental geared simply are not interested in this facet ... as it tends to be quite capital intensive and not really all that great in the leverage department.. cash buyers well they have a leg up ..
Yep ... the fact that it is very niche, requires specific knowledge that not everyone has to spot things that nobody else even knows how to look for, and capital intensive is the very reason I'd imagine it works so well ... sounds like it would be the type of strategy right up my alley, actually ... would love to chat with you about that more offline if you're up for it Jay, or online is fine too, but may be straying a bit from the OPs original topic at that point. Also, I fully understand that you can't possibly explain in one post how it all works, nor should you even if you could, but more interested in the path to develop the vision to be able to spot and execute on such things ...
- Flossmoor, IL · Member since 2016 · 8 posts · 1 vote9yI am in the process of looking for my first property. If i do not use the 70% method what is another option? Especially for properties that require little or not rehab. Thank you all for sharing invaluable information and advice.
- Real Estate Professional · Wesley Chapel, FL · Member since 2017 · 17 posts · 2 votes9y
@David Faulkner I love your ideas! Especially the creative ways that you can convert a home! As @Jay Hinrichs stated, the timber situation may have me in over my head as a rookie investor but it's never too early to have a few alternate strategies in my back pocket as my proficiency increases :) @Matt K., thanks for the heads up. I never intended to use Trulia/ Zillow though- MLS is my first choice and RedFin seems like a strong second!
- Real Estate Investor · Encinitas, CA · Member since 2016 · 3k+ posts · 3k+ votes9yJennifer Brown It's a little labor intensive, but I just focus on properties in the specific areas that I like. Most of the time it's multifamily and it doesn't take long to "work backwards" to come up with a vague (ballpark) price. Sometimes it's close, sometimes it far from the asking price. I can have my agent and see what I'm not seeing (I don't buy local) to further refine the viability. The bottom line is that I pseudo-ignore the asking price. So that really nixes out price filters or ppsf filters. Consequently, I can't do it over a giant metro area encompassing 12 suburbs so my method has limited applicability. And it's usually only viable either in the first 7 days of the listing or after it's gone stale. I can't submit a "low" offer when the property is 30 days on the market because there is (with a competent realtor) too much activity. But if I'm the first inquiry or the only inquiry (stale listing) all of a sudden "low" becomes more reasonable. My latest verbal offer was $107K lower than the listing that had zero offers in 90 days. Who knows if it will come together but it didn't get instantly shot down as "crazy". 🤷🏻♂️ So my net "specific" is get either narrow with your focus or wide on areas you filter out. That's no guarantee that a great deal exists on the MLS in your geo *today* but you'll start to figure out pretty quick what seems oddly low priced/high priced for an area.
- Investor · Orange County, CA · Member since 2015 · 2k+ posts · 3k+ votes9y
Originally posted by @Andrew Johnson:
Jennifer Brown It's a little labor intensive, but I just focus on properties in the specific areas that I like. Most of the time it's multifamily and it doesn't take long to "work backwards" to come up with a vague (ballpark) price. Sometimes it's close, sometimes it far from the asking price. I can have my agent and see what I'm not seeing (I don't buy local) to further refine the viability. The bottom line is that I pseudo-ignore the asking price. So that really nixes out price filters or ppsf filters. Consequently, I can't do it over a giant metro area encompassing 12 suburbs so my method has limited applicability. And it's usually only viable either in the first 7 days of the listing or after it's gone stale. I can't submit a "low" offer when the property is 30 days on the market because there is (with a competent realtor) too much activity. But if I'm the first inquiry or the only inquiry (stale listing) all of a sudden "low" becomes more reasonable. My latest verbal offer was $107K lower than the listing that had zero offers in 90 days. Who knows if it will come together but it didn't get instantly shot down as "crazy". 🤷🏻♂️
So my net "specific" is get either narrow with your focus or wide on areas you filter out. That's no guarantee that a great deal exists on the MLS in your geo *today* but you'll start to figure out pretty quick what seems oddly low priced/high priced for an area.
Great point regarding stale listings ... that is actually how I got a great deal on my primary residence. I would also add with stale listings that you can sometimes "game" them as to when and how much to put your offer in for. For example, sometimes if you look at the listing history for a stale listing, you can see a pattern ... as in, the seller/agent has reduced the list price by $10k every month it doesn't sell for the last 3 months ... then, if you see a pattern like that you can get a feel for if/when it will get down to the ballpark it needs to be price wise ... make a mental note to check back around then, and you can then put an offer in the night before you expect them to drop their price again, with the anticipated price drop, plus an additional smaller price drop to get you a great deal ...
- Real Estate Professional · Wesley Chapel, FL · Member since 2017 · 17 posts · 2 votes9y
@Andrew Johnson I actually like the fact that you "pseudo-ignore" the asking price- I mean, -what's the worst thing that can happen? So you basically seek out Expired listings (30/60/90 days) because the Seller is becoming more flexible. If you don't mind my asking- how many annual deals do you acquire and close using this method? -Just a ball park figure :) p.s. keep us posted about the deal you currently have in the works lol.
- Real Estate Professional · Wesley Chapel, FL · Member since 2017 · 17 posts · 2 votes9y
@David Faulkner I love that- I am seeing a pattern regarding the Expired (or stale) listings and although the strategies require some patience- there seems to be big rewards. I am currently in the market for a new residence- I think I will be using this technique as well ;-))
- Grand Rapids, MI · Member since 2014 · 174 posts · 27 votes9yRhonda Rowland Found two off market properties which the home owners owe more than I want to pay. Any suggestions?
- Atlanta, GA · Member since 2017 · 11 posts · 10 votes9y
Only thing to do there would be a short sale if the owners are open to it. The bank will insist that it be listed but an offer in hand is attractive, especially if you can show that the home needs work.
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