Hello BP Fam,
Curious to get your thoughts on this. I have been spending a lot of time on sites like Realtor.com, zillow, redfin, MLS, etc. learning to search and scavenge for deals in the area's I'm interested to start flipping in Chicago. I do believe this is a good method while starting out to get familiar with the types of listings out there, however it is SO time consuming to make a list of properties, pick the ones to analyze, and then decide whether they are worth pursuing. I came across a few website services that claim to provide you a list of leads that are 20-50% off retail price with the ARV's and profit potential already done for you. Some are free, some require to pay a premium to access.
Are these sites legitimate for deal findings? The idea of the front end research work already being done sounds ideal, but haven't these properties already been through too many hands to end up already analyzed for others? How are they coming up with these profit values and how accurate are they to even trust? Are these wholesalers marketing their properties? Have people (in Chicago) found any success using sites like this instead?
I still work full time and spend my evenings moreso web browsing properties and feeling like I'm not getting as far as quickly as I'd like to. What have you guys found is the most time efficient way to search and analyze deals?
These days, you're going to be hard-pressed to find a lot of good deals on publicly-listed websites or the MLS. I would recommend focusing on off market properties. Using things like direct mail, cold calling, door-knocking, bandit signs, advertising, etc. Get good at one or two off market strategies, and that should solidify your deal flow.
Usually If it’s in the mls it’s already a bad deal
Off-market is the way to go. Wholesalers are largely hit-or-miss, but you would best be served to find your own deals in this current climate. Find pre-foreclosures, probates, back-taxes, etc. and start door-knocking or sending yellow letters and so on.
@Angela Dani - Go check out your local REI meeting and start networking with wholesalers. Get on their lists and be ready to move fast when they put a deal out out there.
@Angela Dani Being local and understanding what is happening on the ground here in Chicago, there are still deals on the MLS. However, they go fast so you have to have a process of your own set up to allow you to be offering the same day or within 24 hours of the property going live. Looks like you are an agent so access to the MLS gives you a leg up. There is also a couple of websites that will take your investment parameters, utilize rent averages, and create your quick proforma. This will allow you to at least rule out 80% and take a deeper dive into the 20% that are close to what you are looking for.
It is smart to get on the list of a bunch of wholesalers as well but in those cases it seems as you must be prepared to act even faster then the MLS and often expected to pay cash(not sure your plan to purchase). If you want I will connect you with the few trusted guys doing the majority of the deals here in Chicagoland off market.
@Angela Dani you are working much to hard. I have done about 500 flips in the Cleveland markets, never once, ( well may 10 times 8 years ago ) used any sites. Its all about networking and your team
@Angela Dani I agree with Dennis. MLS is a low probability bet because everyone has access to it and it's full of intense competition. "Deals" aren't really deals because even beat up properties are selling at a premium. You need to go off-market if you want to find deals. Looking for 'deals' where everyone else is looking is not a good use of time. For finding off-market properties you can try pulling out a list from reliable sites like Listsource. Feel free to message me if you need any help
Doesn't sound like you are not being efficient. It also sounds like you are learning at the same time.
I don't know your market, but in my market there is still plenty of stuff on the MLS. Usually you have to snag it on the listing day though. In order to be able to do this it helps to know the specific neighborhoods you are working in cold. So when you see a listing you know what the ARV could be, what the typical homes in the neighborhood are like etc. Once you have this knowledge it takes seconds to pre-screen a property, and you will spend more time working on viable deals.
@Angela Dani Welcome to BP, Angela.
One way to start getting off-market deals is to go to every Real Estate MeetUp in your area and get on all the wholesalers email list.
After combing through these deals, you will start to master the art of recognizing Great, Good, and Horrible deals pretty quickly!
@Baris Yuksel what do you mean website for Pro forma ?????? It sounds like you really need a team around you. Pro forma is rent less all expenses,
@Angela Dani A lot of investors find that it can be better to look for "off market” deals. These are homeowners who haven’t taken the time and made the investment to fix up their homes before putting it on the market.
Mailing is probably the best way to find these potential sellers. These are people who share motivational characteristics of people ready to sell, but haven't yet done all the work they think they need to list property. The best way to find them is to send out mailers.
Some good lists to target are Absentee Owners with Equity, Seniors with Long-time Ownership and Homeowners with Low Financial Stability Scores.
You can work with a list broker to optimize your list for your area. From there, there are a lot of companies that can help with the printing and mailing. Be sure that you highlight that "selling your house can be easier than you think" with the advantages of working directly with you instead of the more traditional route.
@Angela Dani I have a different approach than many others. Instead of hunting for deals, try making deals. A good deal is just a bunch of numbers that make sense together. A bad deal is just some numbers that don'ton make sense. You can manipulate these numbers by making deals. Remember, a bad deal can become a good one with some numbers changing - interest rate, down payments, sales price, dinancing terms. You can turn a bad deal into a good one by changing the numbers in there. Good deals are never handed to you on a silver platter, and you cant find them either. The secret lies in making deals, not finding them. Make the deal work for you through negotiations, offer strategies, bundle deals, and many more creative strategies. You need to have the ability to turn a bad deal into a golden one. That way when everyone gives up on this deal you find a way to make it work, there you've hot an edge and that's how you win.
It's a lead source. I know some people that are really good at finding deals on the MLS. There are many lead sources so master each one and get them working for you.
Thank you everyone for your responses! This has given me a lot of insight on what my approach shift will be!