I have spent the last few months putting together a list of investors and potential buyers and game planning. My father-in-law is a really good contractor who is semi-retired more than willing to help with my rehabs...now I just need the properties. My father is an appraisor and successful raw land investor in the San Angelo area. But he and several of my investors don't know much about SFUs and the rehab/flip property finding process. I spoke with my father today and he told me two of the big name realtors in town personally own many properties themselves, and might not be the best place to start looking. So, how do you successful folks go about finding your deals?
PS I will be in the San Angelo, Midland/Odessa, and Abilene areas of Texas. Land and housing is cheap...so I'm figuring on having to do a relatively high volume.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
16y
There are LOTS of way to find properties, but these days, buying REOs (bank-owned foreclosures) is perhaps the easiest and fastest way to get started. Just find a good buyer's agent who is accustomed to working with investors, and take him/her to lunch to figure out how they can help you.
You can likely find better deals if you're willing to do some serious marketing, but I know a lot of investors who are sticking to the MLS these, and doing just fine...
Thanks for the input, I know in my posting I was too vague and acted like I wanted all the answers. My apologies.
As for the REOs in my farm area. I have contacted all of the local banks and being from west Texas, and their very conservative lending practices, I recieved a list of exactly 4 properties! With a promise to have them call me whenever they have new listings. I understand that there are more listings than this, but most of them were bought as securities from other banks, correct????
So, how would I go about finding a quality realtor in your experience? Or just call and screen the many and take the few out for lunch?
I know this is elementary but I'm still trying to get this all straight. Thanks again.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
16y
Hey Trevor -
Most of the REOs are going to come from the large banks (even if small banks underwrite the loans, the loans often get sold to the big players), so going around to your local banks isn't going to yield you the bulk of the REO properties in your area.
The nice thing is that all the REOs from the big banks are listed right on the MLS, so if you can find an agent to work with you, you can get access to all the REOs very easily.
As for finding an agent, start with other investors in your area. If you can find one or two investors, they probably know of agents who are investor-friendly. Barring that route, try hanging out where investors hang out (REIA meetings, networking events, etc), and I bet you'll find some agents who hang out there as well. And barring that possibility, just start interviewing agents; tell them what you're looking to do, ask lots of questions, and see who seems best qualified to help you.
I will do that exact thing. I also got a couple numbers from folks that I personally know. Will start there and work my way up.
This may be another question all together, but J Scott, how do you choose your properties for flips? $ per square foot? Area of town? Number of comps? Or just a mix of everything that you have aquired over the years?
Flipper/Rehabber · Orlando, FL · Member since 2008 · 263 posts · 147 votes
16y
We also value buyers agent relationships. Their time is valuable, so be specific with "exactly" what you are looking for (3/2/1+, brick, nice neighborhood, reo, basement, and good location - no busy streets, etc, etc, etc) when you talk to them. Develop a spreadsheet tool that you use to evaluate the deals and include a yield analysis. Then give the agent the tool have him/her fill out the property details - that way they can tell in advance if it will meet your minimum yield requirements - without your input.
When they have some properties (that meet the criteria) for you to review have them forward with a CMA/Comps and look at the numbers and make sure your gut says that they are reasonably accurate. Put a contingent offer in - site unseen. And wait for the bank.. and wait.. then once they accept/counter it is only then that you go see the property.
If you follow this method you will save countless hours/miles in your car and find that dealmaking can be somewhat productive. And the agent will take you seriously!
Just my thoughts. If you need an example spreadsheet email me.
TTFN,
Greg