How are you finding your deals? Lets Brainstorm on what's working

How are you finding your deals? Lets Brainstorm on what's working

Rental Property Investor · Colorado Springs, CO · Member since 2010 · 476 posts · 305 votes

I wanted to get a topic started where we can all share where you are finding your deals. We are all seeing the MLS is not working. I'll start by going over how I'm finding my deals:

1. Direct Mail Marketing to NED List. I am mailing people on the NED each week to target short sale's to create a deal. I mail them a letter each week. Each week I switch from letter to postcard to letter to postcard. All my letters are very informative. I give information about the foreclosure and short sale process in each letter. With this method I am signing up a minimum of 5 deals per week. I just signed up 3 today.

2. Other Investor-Other investors are bringing me short sale leads to process.

3. Pay per lead websites-I pay for leads online from various websites. These website scout for people who want to sell their house. A have closed many deals from these leads. Not all leads are motivated sellers.

4. Subject 2 the existing loan marketing-I am doing postcard mailings for We buy houses in your neighborhood. I have specific neighborhoods I like to buy rentals in and I do a mass mailing each month to my neighborhoods.

5. Website-I have my We Buy Houses Websites that generates leads when people search sell house in my town.

6. Blogging and social Media-This is new to me and it does take time to get this rolling. But I've started doing this for my investment companies 2 months ago and have been seeing results.

7. Avoid Foreclosure Classes and Video's. I'm doing U tube video's to help homeowners avoid foreclosure as well as doing a class they can watch in their home. I tried to do a class once at my office and nobody showed up. I think they were too embarrassed.

I am targeting specifically Short Sales and Subject 2 properties. Lets hear what you guys are doing that is successful and what kind of deals you are targeting!

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Real Estate Investor · Chicago, IL · Member since 2009 · 178 posts · 62 votes
14y

You guys make it sound so difficult? Direct mail? We buy homes?! What?!

What I have been doing is to get on the REO mailing lists direct from banks. They update these once a month or so and send them out to people on their list serve, especially to those people who have closed deals and purchased from them before.

An allegory to this, I have been successful finding deals through the building of relationships with commercial bankers, especially those in the "Special Assets" division. Make friends with them, and they will give you first dibs on their distressed portfolio. And when I mean make friends, I don't mean kiss their a** but genuinely attempt to become friends whether or not you end up getting access to the portfolio. Many times, relationships will lead to more relationships.

Relationships like this have led me to virtually all the deals I have done in the last 6 months. For example, many banks have exposure to commercial loans that have hard assets like real estate as security. A lot of commercial bankers that do not sit in a real estate division have to manage distressed security like real estate, but have no ability to do so because they are literally only knowledgeable in only commercial banking. In a recent deal, I was able to purchase a portfolio of notes from a bank, where the lender borrowed tens of millions of dollars, and as part of his security was a small $4 mm RE portfolio. The banker so stressed with the commercial part of the loan had never visited the properties or even cared about their welfare. We got the portfolio for about $450k, and found that the bank was delinquent on a lot of property taxes, had not secured properties, vagrants and wild dogs living in homes etc.... However, we got the properties deed in lieu from the owner who was in bankruptcy and we have been fixing up these bad boys and renting them out.

A lot of times a good relationship with a banker will reap you benefits even for properties on the MLS. We recently purchased 2 multiunits (8 units total) that were listed on the MLS for $450k. After negotiation with the bank and going back and forth for a month or so we came to a contract price of $250k. We still had to pay the RE broker that listed the property, but the price was negotiated with the bank. He was not pleased with the price. Banks are willing to negotiate if you can cultivate the relationship. Another example, we recently were brought a deal by a Special Assets manager for a local bank. 29 unit building in a busy not so great neighborhood. Was last purchased for $1.2mm in 2004. The building is now vacant and totally ransacked and we have it under contract for $130k. Its gonna need 600k to fix it up, but even at that price, the cash on cash ROI is still upwards of 25%.

My point is hang out where bankers hang out, goto networking events, worth with non profits and people in the community. GO join the most expensive exclusive athletic clubs. Here in Chicago for example, a lot of networking gets done at the East Bank Club, athletic club of the stars and the wealthy. Play some basketball and you will definitely meet some cool cats, useful for your real estate investing business.

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  • Specialist · Cleveland, OH · Member since 2011 · 1k+ posts · 852 votes
    14y

    Honestly, I am lazy. I know tons of way to get great deals, but I just go after homes that are on the open market for the most part. I get TONS of deals that way! Negotiations make the deals for me more than digging for them.

  • Los Angeles, CA · Member since 2009 · 717 posts · 50 votes
    14y

    What do you mean Rob on negotiations? Give us a example. Thanks!

  • Residential Real Estate Agent · Chandler, AZ · Member since 2009 · 1k+ posts · 928 votes
    14y

    Monica

    For #1, are acting as their agent or buyer or which ever works for them?

    Thanks

  • Will BarnardPro Member
    Moderator
    Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
    14y
    I think you meant NOD list, not NED. NOD stands for Notice Of Default.
  • Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
    14y

    Monica Breckenridge When you sign up the 5 deals per week, what are you signing up? A listing? A short attempt? Sub2s? Are you closing 250 deals a year?

  • Wholesaler · Fort Myers, Cape Coral, Naples, FL · Member since 2009 · 185 posts · 33 votes
    14y

    Thanks Will, I was scratching my head on that one.

    Very good topic Monica, I get mine off of the MLS or by word of mouth but want to start trying other things such as direct mail.

  • Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
    14y

    Brining a FSBO owner to reality is fun.

    And, investors "helping" people avoid foreclosure and advertising assistance just scares me! Don't go there unless you are qualified (legally) to do so.

  • Real Estate Investor · Chicago, IL · Member since 2009 · 178 posts · 62 votes
    14y

    You guys make it sound so difficult? Direct mail? We buy homes?! What?!

    What I have been doing is to get on the REO mailing lists direct from banks. They update these once a month or so and send them out to people on their list serve, especially to those people who have closed deals and purchased from them before.

    An allegory to this, I have been successful finding deals through the building of relationships with commercial bankers, especially those in the "Special Assets" division. Make friends with them, and they will give you first dibs on their distressed portfolio. And when I mean make friends, I don't mean kiss their a** but genuinely attempt to become friends whether or not you end up getting access to the portfolio. Many times, relationships will lead to more relationships.

    Relationships like this have led me to virtually all the deals I have done in the last 6 months. For example, many banks have exposure to commercial loans that have hard assets like real estate as security. A lot of commercial bankers that do not sit in a real estate division have to manage distressed security like real estate, but have no ability to do so because they are literally only knowledgeable in only commercial banking. In a recent deal, I was able to purchase a portfolio of notes from a bank, where the lender borrowed tens of millions of dollars, and as part of his security was a small $4 mm RE portfolio. The banker so stressed with the commercial part of the loan had never visited the properties or even cared about their welfare. We got the portfolio for about $450k, and found that the bank was delinquent on a lot of property taxes, had not secured properties, vagrants and wild dogs living in homes etc.... However, we got the properties deed in lieu from the owner who was in bankruptcy and we have been fixing up these bad boys and renting them out.

    A lot of times a good relationship with a banker will reap you benefits even for properties on the MLS. We recently purchased 2 multiunits (8 units total) that were listed on the MLS for $450k. After negotiation with the bank and going back and forth for a month or so we came to a contract price of $250k. We still had to pay the RE broker that listed the property, but the price was negotiated with the bank. He was not pleased with the price. Banks are willing to negotiate if you can cultivate the relationship. Another example, we recently were brought a deal by a Special Assets manager for a local bank. 29 unit building in a busy not so great neighborhood. Was last purchased for $1.2mm in 2004. The building is now vacant and totally ransacked and we have it under contract for $130k. Its gonna need 600k to fix it up, but even at that price, the cash on cash ROI is still upwards of 25%.

    My point is hang out where bankers hang out, goto networking events, worth with non profits and people in the community. GO join the most expensive exclusive athletic clubs. Here in Chicago for example, a lot of networking gets done at the East Bank Club, athletic club of the stars and the wealthy. Play some basketball and you will definitely meet some cool cats, useful for your real estate investing business.

  • Investor · Hampton Bays, NY · Member since 2009 · 907 posts · 258 votes
    14y

    I maintain contacts with investors I have met as well as real estate agents my insurance agent and people I have met in the community including those at Catholic chariest and the local Veterans administration. I do not have a need to get many deals because I don't wholesale or fix and flip. I buy and hold for now.
    I have more properties than I can handle at the moment but will renew my contacts on the next the next trip to Dayton.

  • Rental Property Investor · Colorado Springs, CO · Member since 2010 · 476 posts · 305 votes
    14y

    Justin S. If it turns into a listing, then yes I will be their agent. If I buy the house, then no I am not an agent in the transaction. It needs to be arms length.

    Will Barnard NED is what it is referred to in Colorado "Notice of Election & Demand". Yes, it would be NOD for those not in CO.

    K. Marie Poe I am closing a ton of deals, but not that many. Each year I close more than the previous year. They are a combination of realty deals and investor deals. I close way more realty deals than investor deals. I am very picky on the houses I want to buy and only pick the cream of the crop. We also have dead months and don't sign up many deals at all. The summer and January is when I sign up most of my deals and fill up my short sale pipeline a lot. But you also have to understand we get some short sales that flop because the sellers don't cooperate or they call us last second and we were too nice to turn them down. We are trying not to do that anymore.

  • Rental Property Investor · Colorado Springs, CO · Member since 2010 · 476 posts · 305 votes
    14y

    Vic L. Thanks for sharing Vic. Nice strategy. I've been wanting to do that myself but just haven't found the right people. I'm really good friend with the people at my bank, but they are local and they tend to not want to sell at a discount. This bank wants all their houses back and they remodel and put back on the market.

  • Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
    14y

    Monica Breckenridge Thanks for clarifying. "Realty deals" are listings, including short sale listings, correct? Never heard agents refer to listings as deals before.

    Your marketing is obviously reaching sellers and prompting a lot of them to act, which is fantastic. Do you target only potential short sale sellers? Or do you have other targets as well?

  • Investor · Garland, TX · Member since 2010 · 99 posts · 92 votes
    14y

    Hi Monica,

    I am finding my deals from probate leads. I mailed out letters and postcards to executors every month.

    Tim.

  • Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
    14y

    I'm doing the same type of direct mail marketing I've done for the past few years. My weekly mailings are anywhere from 50-200 letters. The response rate is still OK at about 5%, but the calls and leads for March and April were the worst I can remember. Lots of tire kicking and totally unmotivated sellers who aren't going to sell to anyone, ever. I'm thinking my marketing letter may have somehow evolved into something that gives the impression that I'll buy anything and that I don't know values. Or maybe it's just been a long two months.

    Some of my offers and leads take months to get to contract. I'm a no rush buyer for most leads and there's usually a lot of back and forth with the seller. I've lost three leads to higher offers since December. I have regrets on just one. None of my other leads or offers since January have yet sold to anyone else.

    My farm for the last ten years has been one city and 2 small desert towns. For the last month, I've been testing some other areas in the Central Coast and SoCal. The response rates on the tests were lower than I like, but I'll be doing bigger mailings for May and June to 4 new markets.

  • J ScottPro Member
    Moderator
    Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
    14y

    Monica -

    What percentage of your short sale offers that you try to buy as an investor actually go through at a price you can turn into a deal? If the bank doesn't approve at your offer price, does your short sale agent try to find another buyer? Do you get anything out of the deal in that case?

  • Will BarnardPro Member
    Moderator
    Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
    14y

    I have received most of my deals from relationships I have developed with REO brokers as well as asset managers.
    Over the last year, I started playing the MLS numbers game as well in an effort to get more deals in this tight market.

    I have developed a new system to allow me to play the MLS game most efficiently and successfully which I will be sharing soon.

    I am a firm believer that relationship building is key to getting deals.

    In addition, if you are not working the short sale market (at least in my neck of the woods) you are really limiting your chances of getting deals as REO's are much harder to come by for rehab investors, the spreads are thin and the inventory is small.

  • Lexington, KY · Member since 2009 · 2k+ posts · 1k+ votes
    14y
    Originally posted by Will Barnard:
    I have received most of my deals from relationships I have developed with REO brokers as well as asset managers.
    Over the last year, I started playing the MLS numbers game as well in an effort to get more deals in this tight market.

    I have developed a new system to allow me to play the MLS game most efficiently and successfully which I will be sharing soon.

    That sounds fun Will Barnard...I am interested. This isn't something I have to pay $10K for is it?

  • Investor · Orlando, FL · Member since 2012 · 431 posts · 106 votes
    14y

    Also looking forward to the MLS system you've created.

  • Rental Property Investor · Colorado Springs, CO · Member since 2010 · 476 posts · 305 votes
    14y

    Hi Marie, i guess i refer to my realty deals as "deals" because i'm an investor. I mostly market for short sales. I also market for sub 2's and cash deals that dont require a short sale. You mentioned that leads were realy slow lately. Mine slowed down as well and i was doing the same marketing. I go through cycles where I sign up a ton of deals and sometimes very few. Since May my leads have skyrocketed and have suddenly been signing up at least 5. But this week I already have 5 leads signed up and its only Tuesday.

    Hi jay, i am very picky on the short sales I sign up as buys. The house needs to be trashed. I get almost all my deals to go through-95% or higher. If for some reason the bank doesnt take my offer the agent who lists it gives me 15% referral fee back to my realty company. But if I have one of my agents list a house I get 50%. Most of the deals I sign up as a buy almost always go through, so it doesnt bother me that I only get 15% if it doesnt.

  • Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
    14y

    Monica Breckenridge You say your short sale offers as a buyer almost always go through? So the majority of the time the lender is accepting your short sale offer. Is this without it being offered on the open market and without any other offers? I don't for a second think you would overpay, so what gives? How is it that the majority of lenders are agreeing to a short pay, and selling to you, without listing it on the open market? Does NO ONE else want the property for more than you would pay?

  • Rental Property Investor · Colorado Springs, CO · Member since 2010 · 476 posts · 305 votes
    14y

    Mary the realtor that lists the property gets my offer under contract immediately. We have a short sale addendum to the comtract and we can mark wether or not the seller can or cant terminate for other offers. I always mark that they cannot terminate for other offers. Do my offer is the only one being negotiated until i cant come up to the banks unreasonable price. At that point the realtor would activate the listing.

  • Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
    14y

    Monica Breckenridge Again, thanks for the additional details. I'm still confused because, even if your sellers can't terminate, I would think the lender would want to see more offers before accepting yours. Lots to think about for this short sale resistant investor. Thanks for that!

  • Real Estate Investor · Denver, CO · Member since 2011 · 74 posts · 24 votes
    14y

    We primarily focus on off market deals through many of the sources that have already mentioned.

    I would like to share a few deals I got in the last week as they are not the normal route I usually take to find deals. The best part is I didn't spend any marketing dollars to get these.

    I was successful last week getting a deal that was listed as a FSBO. Just happen to drive by it and notice it was empty and needing work...I called and the seller was actually asking a reasonable number on it. I signed this with very little effort. I can wholesale this one and make $15-20k or rehab it and clear a really nice spread.

    I also hit up an estate sale over the weekend and spoke to the people holding the sale. A brother and sister inherited their mothers house and I negotiated a deal right there. They signed my offer the very next day.

    I may have just gotten lucky here as most FSBO sellers typically are not realistic about their desired price-point.

  • Investor · Austin, TX · Member since 2011 · 155 posts · 23 votes
    14y

    This is a great thread, I got some awesome takeaways. I have been doing we buy houses door hangers every other week in my targeted neighborhoods. I started off with a very decent return rate on those but in the last 3 months the well has ran dry and I am contemplating whether to revamp the copywrite which is simple or just switch the neighborhoods. I mostly come up with shortsales which I funnel to my wife who is licensed or I get sub2 deals.

    I also send out 50 handwritten letters a month to absentee owners or landlords. Those give me a high volume of incoming leads however a small percentage are motivated sellers.

    I also do penny saver adds with we buy house, those are being evaluated as well because I get a lot of calls from rural areas with folks looking to dump junk trailors and I politely turn those down.

    I am in search of sub2 deals and I also use word of mouth from relationships with homeowners, if I cant get an option on the homes I pass them to my wife who takes the owner finance listing.

    Finally I do a craigslist campaign for owner finance buyers, this keeps the phones ringing as well but many buyers are unloyal and seem to be fishing for something for nothing however I keep a steady flow to choose from I just need to get just as many homes to sell to them owner finance.

    I am curious to find out a ball park figure most spend on direct mail, SEO search engine optimization and other techniques mention in this thread.

    I really feel that relationship building is the key ingredient and if I can hangout with bankers then I think my network will = my networth.

  • Lender · Tyngsboro, MA · Member since 2009 · 3k+ posts · 2k+ votes
    14y

    Great thread, and lots of good takeaways, I'm sharing with my network.

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