No really, how do you guys find your deals?

16 Replies

I know everyone and their mom asks this...but really I am struggling. I have been researching, reading, talking to people, saving and generally kicking the REI can around for a good 9 months now. And I just cannot pull the trigger on anything. No deal in particular looks that great to me..am I looking in the wrong place? Maybe I am waiting for a good deal instead of MAKING a good deal? How do you guys find your deals and what makes you pull the trigger?

The more you look, the smarter you get. I look on realtor.com, homepath.com, SPREO, MLS, etc. These are listed online. I am a buy and hold guy, so I'm looking for property in certain areas where I know it will rent well at a good rate. If I see one that meets that, I investigate further. Make your offer based on your expected rate of return. Disregard the listed price. Sellers are happy if you make an offer, regardless of how low it may be. It gets the conversation started.

Other ways is to drive the area that I want to buy.  There you will see for rent by owner signs.  Call them and see if they may want to sell.  Post on a local FB page that you will pay cash for houses.  Forget bandit signs.

Tina, what KIND of deal are you looking for? Are you looking to wholesale, buy and flip, or buy and hold?

Personally, we are getting close to finishing our first flip. Bought the house through a local wholesaler (which was not a very smooth process due to poor communication within the wholesaler company and with us. The title company was horrendous.). The deal was good, and as should be expected, there were some unexpected issues. We looked for months through MLS listings, bid on several but did not win them simply because we would not have made any money if we bid higher.

So, for buy and flip, I think that either buying from a wholesaler, or directly from the owner of a distressed property is usually the best way to go, IMHO. If you are wanting to wholesale, I suggest talking to some wholesalers and listening to Flipping Junkie podcasts. For buy and hold; I don't know.

The one thing I think everyone would agree with though, is that eventually, you will have to look at a deal, decide it's worth a try (making a little is better than making nothing), taking a deep breath, and just pulling the trigger. Just Jim's thoughts.

Tina, 

Couple of thoughts for you.  Are you really clear on what you're looking for?  

Are your criteria too stringent? 

Are you being too conservative in your underwriting?

Are you talking to the enough people?

Are you talking to the right people?

Have you tried the sheriff's sales?

The great thing about buying and holding is that even if you don't steal the deal, as long as you can get positive cash flow, you will make money over time.  With a flip, your numbers have to be exact and you get paid once.  Wholesaling is harder than it sounds.  Inventory is low and we are in a rising market.

Price based on condition and location.  I find places all the time around here that could be great deals but the people selling are usually retarded or shady as hell.  

I had a guy tell me he had a house, wanted a cash deal but didn't want to show it or for me to get it inspected or pay for title insurance.  It was rented but I suspect he didn't have a lease either.

If I even mention the words purchase agreement or title policy, they scatter. 

So I low balled him 26,000 under his asking with no counter.  I've low-balled 10,000 under asking and people will still not counter.  People around here don't realize that if your price plus rehab is creeping up on ~85,000, well, I can buy land and build new for that price AND have it appraise for 105+/sqft for the cash out.  And if they're shady and don't want a title search?  It's a no-go.

If I find a good deal on an already built home and can close, I will.  I'm looking for the great deals though, not wasting my time on break-even or $100/door crap.  So I'll keep hunting for houses/MF or will just buy land deals in great areas that don't require grinder pumps or that already have taps in place.

Tina,

I recommend you go back through old podcast episodes, you'll hear this discussed frequently. Direct mail marketing, driving for dollars, county auctions, wholesalers, perhaps even working with a realtor depending on the kind of deal you're looking for and your goals.

I just got a house from Auction.com, and got an amazing deal.   The other way we get great deals, is that we buy houses with cash that are "as-is" and offer 30-40% off the ask price.     I guess it all depends on what your strategy to determine what the best path is.     

Our next purchase will likely be done through driving for dollars.   Good luck!

would be great to hear from more local Cincinnati investors who have experience finding deals in THIS market..... I'm a new local investor as well and am having the same struggles...

Maybe I'm a bit biased because I'm an agent but I think working with a realtors who specializes in investment properties is a good way to find deals. You can't just utilize an agent that surfs the MLS and has no idea what a Cap rate is and is used to selling to first time home buyer...But rather find the one that has experience in investing. Either because they work with investors on a regular basis or they are investors themselves. I find more deals off market for my clients than I do from the MLS. But I think having a real estate professional that has the time to hunt down properties and do the networking is important to find the right deals.

Good Luck

George

I agree with @George Emmons .  Having someone sourcing deals for you will allow more time to focus on the renovation / flip.  We are wholesalers in the Cincy market and have a consistent deal flow.  PM me if you are interested.

@George Emmons If only the agent that you describe actually existed.  I have yet to find any that resemble what you describe.  That is one of the main reasons that I became an agent. I couldn't get one to answer the phone, show me a property, or find anything that I couldn't find on realtor.com.

If you find this agent, please capture them so we can study them closely.

My customers look for deals all over and I encourage them to do so.  Some of my competition gets their panties in a wad if a customer buys a deal from anyone but them.  To me, if I don't have a deal that matches what you're looking for when you need it, then go buy it where you can.

I won't share my sources to find deals in Cincinnati since I'm in the business of selling them to investors like you guys, but there's value in having relationships with a few wholesalers and agents.  As @Anthony Dooley said, lots of agents claim to be experts dealing with investors and lots of wholesalers claim to have great deal flow, but the proof is in the pudding. As a 2 man shop last year, we sold 65 houses to real estate investors in Cincinnati and the median resale price of all houses resold since I started in the business is over 105% of my going in ARV.

Without a face-to-face conversation, I couldn't begin to guess why you haven't been able to pull the trigger on a deal yet.  If you'd like to have that conversation (even if it doesn't lead to buying a house from me), please call or email me.

Originally posted by @Anthony Dooley :

@George Emmons If only the agent that you describe actually existed.  I have yet to find any that resemble what you describe.  That is one of the main reasons that I became an agent. I couldn't get one to answer the phone, show me a property, or find anything that I couldn't find on realtor.com.

If you find this agent, please capture them so we can study them closely.

Anthony, what advantage does agent license gives as an investor over investor without one? Also if you work in several states do you need separate license in each? 

The advsntages, to me, are the ability to access properties listed on the MLS and the ability to write my own offers on state approved forms, and list my own property.

Disadvantages include; board of realtor dues, continuing education requirements, regulations, etc.

Having a license is not required to be an investor. The pre-license training does not make you a smarter investor either. 

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