Hello, everyone. This question is for anyone that actually obtained a property for house flipping within the last 6 months.
How are you finding leads for your off market deal? (It is especially helpful if you are in the Portland, Oregon area.)
I am relatively new to flipping and I have not been having any success finding single families that show good metrics for flipping. The MLS does not seem to have anything and I have been checking regularly. I even work with a local realtor I found on BP, but it seems like nothing is out there.
Additionally, I set up a Carrot site and paid for a list of off-market houses in a few zip codes that I have identified as desirable flipping neighborhoods. The houses targeted were the niche lists as described in many of the BP podcasts. After that, I sent out over 1,500 postcards that were made by 2 different real estate marketing companies. I was surprised to find out that I did not get a SINGLE call or lead through my website. Not one person contacted me as a result of the mailing. Not even a bad lead called.
I understand that I am supposed to spend 3 months and many mailing campaigns to see results, but it seems like that would be a huge gamble at this point considering there was nothing to show for the first round.
Any thoughts on online marketing, auctions, etc? What are people actually doing now to find something? Anything?
@Erik Gensler There are hundreds of wholesalers in the Portland market. Some of which actually produce and send out 1-5 properties/week. I would identify some wholesalers and tell them exactly what you’re looking for. There are wholesalers who will target a specific area if they know there are multiple buyers looking there.
I have found a couple of off market deals in the past. One through Facebook and another through my network. I am starting a more targeted direct mail campaign as well. I plan to send 1 piece/month for 6 months to the same addresses. I am sending them to specific areas that my clients are looking for properties.
@Erik Gensler I want to start off by saying you are doing GREAT! DO NOT STOP GRINDING! It is way more than what 99% of people are doing.
With that said you sound CRAZY!!! You started doing something for one month and you expect to be killing it already? When have you ever started anything and in one month you are out performing people who have been doing it for years? NEVER!
Considering the market is so hot right now people are getting at 5-10 postcards a month. If you sent one for one month and everybody else is consistently doing it you are going to get beat out every single time. You have to be consistent with your marketing or it will NEVER work.
Since you used two different companies which tells me they aren't hand written. Why would they go with you when you sent a postcard that was most likely the same as everybody else's postcards and everybody else has been mailing them every single month consistently besides you?
Hand written letters I would've expected 1 out of 1500 to maybe get a reply, but even then maybe not. Handwritten letters are just more likely to be opened and read. Would you read a handwritten letter or a laminated postcard? Which one are you throwing away faster?
As for the website Search Engine Optimization (SEO) takes about 6 months to get well and it takes a lot of time and effort. You website isn't expected to do well immediately. It takes a lot of time, energy, effort and money in this scenario. Or you can do a pay per click (PPC) campaign on google to have your website at the top. If you did that I would've expected you to get something back, but if you didn't work towards either of those two things it is expected. If your landing page for your website isn't very well made people may click away immediately.
I say these things to hopefully push you past this discouragement that you seem to be feeling! Consistency is key. You have to take one step forward every single day. Just one and everything else will work itself out!
@Erik Gensler Letters have a better reply rate than postcards, they cost more but your cost per deal is actually better. Yes, there might be a couple hundred "wholesalers" in your area, but I'd bet only a handful are sending DMM as most wholesalers don't have any capital for DMM. Carrot sites are relatively inexpensive and all look the same when you first set it up. Have you done any customization to your site? Have you made it so you appear to be the most trustworthy home buyer in all of Portland?
I am an investment focused realtor and look to invest myself. I am connected to a handful of wholesale guys here in the area that shoot me their deals to analyze. Send me your email address as I forward along these vetted wholesale deals to my clients after I analyze and can project a potential margin with my ARV.
@Erik Gensler last deal came from a former neighbor, who lives across the street from a house where mom passed away and daughter was cleaning it out. They struck up conversation, got contact info, former neighbor told us, we called, got deal.
Deal prior to that, was on the MLS. Had been sitting for 75 days, also was through the kids that got it from estate.
With all my recent flips, the only reason they are deals is because we (my wife and I) are willing to do EXTENSIVE rehab. Moving walls, rewiring entire house, adding bathrooms, relaying out kitchens including new plumbing runs, etc. I cannot speak to Portland, but Cincinnati is a very popular market as of late, and I am seeing wholesalers in general, over paying and therefore under estimating rehab costs and over estimating ARV. And if the property only needs a surface level rehab, a retail buyer is getting it with no profit potential in mind.
That comes back to off-market deals, which as noted are possible, but will take a lot of time, testing many approach angles (have you knocked on doors yet?) and catching someone at the right time.
For the postcards you are mailing - I would add your mailing address to the list so you can see how the postcards look, confirm the are being mailed, and the phone number is correct? I think it is fair to ask those questions if you have mailed 3k postcards and didn't receive at least 1 unpleasant call ;)
like @Ian Crist I take an investment-minded approach to real estate.
I work am very involved in the property management side of things real estate-wise, too.
I'd love to connect and see how I can help you.
@Erik Gensler , We source our deals from 4 main locations:
2. Pay Per Click
3. Agents we have built relationships with
4. Our vendors that refer sellers to us
We don't rely on just one of these because they ebb and flow. I would find a couple of REI Groups in Portland and start networking and get yourself on as many wholesale lists as possible. Pay Per click made us a 10x return last year, so it may be worth consideration.
We have purchased 3 properties from relationships with our agents in the last year where people wanted to sell but didn't want to deal with showings. The agents called us and told us to make an offer. The sellers were happy, our agents got a listing out of it once we rehabbed, and we made money. Everyone was happy.
Hope this helps.
Thanks for the feedback, everyone.