Finding deals from the MLS

39 Replies

Anyone having success finding deals from the MLS in Houston, Texas? There were a couple properties I wanted to submit an offer on. I always need to offer below the listing price for my numbers to work but it seems that everyone else seems to bid above the listing price so I am just not having any luck with this route... Thank you

Depends somewhat on your price point. I was buying in the $150k ARV range for awhile. My first deal was from an MLS listing. It took 4 months...75 showings...20+ offers. I was competing with families with emotional buying...all offers were above list and many highest and best. I found a diamond in the rough though. Just had to be persistent.

But after that experience it seemed too hard to keep buying that way. I learned about wholesalers and never looked back.

@Ben Miculob Finding deals in MLS needs lots of patience and if you are looking for discount deals it depends on the area and competition. You can buy turnkey rentals easily in MLS but not discounted properties. If you want discounted properties, you need to work with Wholesaler or investor mentors. Market is expected to slow down bit and it may be getting to buyer's side but so might have better chance later.

Originally posted by @Tony Castronovo :

Depends somewhat on your price point. I was buying in the $150k ARV range for awhile. My first deal was from an MLS listing. It took 4 months...75 showings...20+ offers. I was competing with families with emotional buying...all offers were above list and many highest and best. I found a diamond in the rough though. Just had to be persistent.

But after that experience it seemed too hard to keep buying that way. I learned about wholesalers and never looked back.

 Thank you all for your feedback!

Hi Tony, what made it a diamond in the rough? How did you end up finding it and getting your offer accepted? I am also buying in the same price range. Thank you.

They are out there. Most of the deals we are doing right now were pulled right from MLS.

@Tony Castronovo , that's what I'm seeing as well, won't say that there are no deals out there, but it's a competitive market going for that low hanging fruit. Do you have any recommendations for wholesalers that you'd like to share (either here or in PM)? I've got a fairly specific criteria that I'm looking for currently, so the more hooks I can have in the water the better.

@Jason Bible , looks like your sweet spot are in those small-mid sized apartments for the most part, I'm not sure what Ben's criteria is, but that could cause a difference in results being found. However I'm curious, why don't you use a more dedicated funnel? With the team you have built I would think it would be beneficial to work with a wholesaler or creating your own off market deals with the kind of volume you're doing. 

Originally posted by @Nicholas Hill:

@Tony Castronovo , that's what I'm seeing as well, won't say that there are no deals out there, but it's a competitive market going for that low hanging fruit. Do you have any recommendations for wholesalers that you'd like to share (either here or in PM)? I've got a fairly specific criteria that I'm looking for currently, so the more hooks I can have in the water the better.

@Jason Bible, looks like your sweet spot are in those small-mid sized apartments for the most part, I'm not sure what Ben's criteria is, but that could cause a difference in results being found. However I'm curious, why don't you use a more dedicated funnel? With the team you have built I would think it would be beneficial to work with a wholesaler or creating your own off market deals with the kind of volume you're doing. 

Those deals on the board are just our partnership deals.  Rob and I have about 12 or so that are duplexes and singles.  I built a company that flipped almost 500 houses over 6 years.  I sold that company to my business partner in September.  We want to buy about 100MM in assets over the next 5 years all buy and hold SF, AirBnB, and multifamily.  I dont think we need to build a huge investor focused team to do so.  However, we are building a team under Keller Williams to help us buy more, possible access to pocket listings, and represent investors and retail buyers and sellers.  

I've never had much luck working with a core group of wholesellers.  The Houston market is extremely efficient for wholesaling deals.  So a lot of the deals I see are priced, and sell, so high that it doest make much sense for my style of investing to spend a whole lot of time or money investing in a wholeseller. 

Originally posted by @Jason Bible :

They are out there. Most of the deals we are doing right now were pulled right from MLS.

Thank you for the info Jason. Are you finding any SFH with ARV under 170k? I came across your insightful article "You can't fake equity" so you must be finding deals which are at least 70% of ARV minus repairs?

@Ben Miculob what made this a diamond in the rough was that I found a property in Katy, south of I-10 for $113k. It was a $10k rehab and rented for $1375. Cash flowed very well. ARV was only around $140k (small 3BR home around 1100 sqft).

It was my first property so really just wanted to learn.  As you can see by the spreads, it was far from a home run.  But it was a solid rental...easy to keep long term renters being in Katy ISD.  It gave me confidence to take on the next one.

Hi @Nicholas Hill .  I've worked with some great and not so great wholesalers.  Unfortunately, my best one moved out of state...but I still have a great wholesaler I would recommend.  I bought several houses from him.  

Note that I am referencing the "individual".  Some people may have different experiences with the various larger wholesale "companies"...several whom I have worked with.  It's really key to find the right individual who knows exactly what you are looking for and knows you will close on it if it checks your boxes....that is the best relationship....because you are the first phone call.

PM me and I will provide you contact info.

Originally posted by @Ben Miculob :

Anyone having success finding deals from the MLS in Houston, Texas? There were a couple properties I wanted to submit an offer on. I always need to offer below the listing price for my numbers to work but it seems that everyone else seems to bid above the listing price so I am just not having any luck with this route... Thank you

Hi Ben,

A big mistake I always see with investors is offering prices too low to make their numbers work.  They end up losing to offers that are higher.  The market dictates the price your numbers and analysis do not.  The market is telling you that you need to raise your offer.

Now, this is a thin line you have to walk because you want to stick by your analysis but at some point, you have to look at your numbers and realize it can be wrong.  I am not saying that you are wrong but every investor needs self-awareness of what the market is telling them because it is ever-changing. 

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@Frank Wong that is purely your perspective as a RE broker.  Not wrong, but why in the hell should any investor chase a deal, because the market is pushing the numbers too high?  Is the goal to win the bid or is the goal to actually make money investing?  

If they end up losing THAT deal to others making a higher offer, then that is OK.  99 out of 100 offers will be like that.  Your investor client only needs one to get accepted, but they also need to be prepared to make a ton of offers.  

The market is not telling me that I need to raise my offer.  The market is telling me that somebody else might be prepared to pay more -- which means that (a) this property does not work as an investment, or (b) some investor out there doesn't know what they are doing.

Originally posted by @Mark Sewell :

@Frank Wong that is purely your perspective as a RE broker.  Not wrong, but why in the hell should any investor chase a deal, because the market is pushing the numbers too high?  Is the goal to win the bid or is the goal to actually make money investing?  

If they end up losing THAT deal to others making a higher offer, then that is OK.  99 out of 100 offers will be like that.  Your investor client only needs one to get accepted, but they also need to be prepared to make a ton of offers.  

The market is not telling me that I need to raise my offer.  The market is telling me that somebody else might be prepared to pay more -- which means that (a) this property does not work as an investment, or (b) some investor out there doesn't know what they are doing.

 Hi Mark,

Actually, this is my perspective as a real estate broker and an investor.  When I invest I don't chase deals and I also rarely lose out on the deals based on my correct analysis.  The point is that if an investor continues to lose out on deals they need to have the self-awareness that what they are doing could be wrong.  Now if you are an experienced investor and have a proven system then no you can wait for your 1 out of 100 deal.

If you are an investor letting deals pass you by, 2014, 2015, 2016, 2017, 2018, and 2019 I mean something is wrong with your numbers right?   I've seen investors like this and I have seen buyers like this.  People not adapting to the changing market.  Like I said it's a thin line to walk but this is when experience pays off.  I am sure your experience and proven concepts allow you to sit and wait with confidence. 

Originally posted by @Ben Miculob :
Originally posted by @Jason Bible:

They are out there. Most of the deals we are doing right now were pulled right from MLS.

Thank you for the info Jason. Are you finding any SFH with ARV under 170k? I came across your insightful article "You can't fake equity" so you must be finding deals which are at least 70% of ARV minus repairs?

Ben here's the hard part of this business "who's 70%?"  If I am using cash, my own crew, and I constantly shop for discounted materials at HD my 70% is way higher than a new investor because I am more cost efficient.  

What level of rehab?  If I am building above market product ill never be close to 70%.  For example I put vinyl plank throughout my rentals, even if the floors are great.  I also replace everything at half life.  Water heater older than 5yr, I replace it.  15yrs on HVAC, replaced.  

Glad you liked the article.  My former company, RightPath Real estate's blog is the home of all my old content.  There's some great stuff in there.  New website, blog and podcast should be up and running in a few weeks.  Otherwise just head to my facebook page.  We post live videos daily.  

There are soooo many investors in TX and it's a competitive market. One of the best things you can do is make a lot of connections there.

  • Connect with as many agents as you can and offers them a private finders fee if they bring you pocket deals (deals not listed on the MLS yet).
  • Start creating a team of birddogs. Everyone you know and everyone you meet, tell them to keep their eyes out for vacant lots, motivated sellers, etc., and you'll give them $100 anytime you close on one
  • Put out ads but make sure they are really different from anything else there so you stand out. Then occasionally a motivated seller will come to you.

@Frank Wong I am nowhere near having a tried and true system, I will say that openly and honestly.  Still figuring it out, and that is why I am here. 

And I think we all would have to agree that if you are not buying anything you are not able to earn any kind of return.

@Mark Sewell

Yup exactly Mark.  Gotta buy to make money but can't just buy to buy.  I get where you are coming from. 

So Frank, I guess you have a very specific buying criteria then?  And you are buying to hold and rent, or are you flipping?  or something else?

You will probably find more success off market. It's more work to find, but less competition. MLS deals can be gotten, but your low offer is being filtered through an agent that is discouraging the seller from accepting.

A lot of great nuggets here! Thank you!

Originally posted by @Mark Sewell :

So Frank, I guess you have a very specific buying criteria then?  And you are buying to hold and rent, or are you flipping?  or something else?

 Hi Mark,

Yes, I have very specific criteria.  I'm a buy and hold investor so I can be more aggressive in pricing.  I only buy properties that fit what I am looking for.  I buy value add and look for 12-25% equity upside after rehab.  I pay cash so I have buying power and my terms are unbeatable.  I go non-contingent 7-day close.  The risk is all factor in when I buy. 

A lot of the time its a waiting game for me.  Its weird thing about real estate some months nothing and then all of sudden 2-3 that fits the criteria.  I don't play the 1 out of 100 game.  Once I find what I want I get it maybe I'll make a little less margin but that's not my concern bc I'm holding it for a long time.   Just how the market is right now.  Gotta be aggressive when something good pops up.  Good to me is different than say good to you or different investors.  Everyone has different goals and strategies.

I see deals every day on the MLS. It's just another lead source.

I think Frank might be Wong... But also very right... The market I am in got so hot a few years ago that nobody was finding deals on the MLS. But this was a big part of my business, so I didn't want to accept it. My business coach and I broke down my whole process to make my business more efficient. After months of working on My MLS process, I realized 2 things. I have to make higher offers without making less money, and I have to make my MLS offers more irresistible to the listing agents. I don't like to write much so I will keep this short. I went through my business and found ways to cut cost which lead to me being able to increase my offer by as much as 10k and still make great money. I also spend a lot of time putting myself in the shoes of the listing agent to hack the optimal way to get my offers accepted way more often.

Now in 2018, I bought 17 houses from the MLS with average profit 37k in a hot market of DC/Maryland. My final thought I will share is everyone should ask the question "how do I get my offers accepted without going broke." If you ask long enough, you will find the answer. I hope this was helpful.

Another way to look at it is, how can you make your offer stand out from the crowd, even if it is lower? When we make an offer on a MLS listing we try and find out what is important to the seller and see if we can add any value. We've had luck being able to offer cash & a super quick close / offering a lease back / putting large earnest $$ down / offering to haul away junk / etc . . .being able to help solve a seller's "problem" is sometimes more valuable than the purchase price and gets our lower offer noticed. Most of the time we get passed over, but we've also had luck & you never know what motivates people!

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