@Pyrrha Rivers. Not sure I'm the right one to follow on finding a deal.
But for me, its all about having a good size market to look for houses in and then learning the markets. I'm south of Chicago and really not a suburb of it. More just like a bunch of small towns that all flow into each other.
That being said. Here is my process for finding a deal.
1) Check the listing sites daily. And I do mean daily.
Hud, realtor.com, auction.com, hubzu,com.
2) Look for my target properties:
a) 1,200 or more square feet
b) 3 bedrooms
c) 1.5 bath
3) Look for anything listed around 130k or less.
I'm looking to be all in (purchase plus rehab) at about 65% LTV. And the numbers only seem to work in that price range where the house sells for between 60k to 90k.
But I like to watch the stuff as it drops down to 130k or less because those houses at 130k can magically end up price dropping enough to where they can be had for that 60k to 90k range and I can be all in at my 65% LTV.
I won't make low ball offers on 130k listings that have been on the market for 2 weeks. Instead, I'll wait for those 130k listings to come down to say 100k and that have been sitting on MLS for 3 months. Then I'll try an 80k offer. HUD deals are the best. Just gotta be willing to sit on the sidelines until they've hit that 2 to 3 months mark. Then the discount magic can happen.
4) Go look at houses.
This is a very underappreciated step. Bottom line is that its really important to see the houses before the prices really drop. Once I've seen it and have an idea on the rehab, then when they do drop the price, I can put in an offer that day.
And believe me when I say, that ability to offer that very day they drop the price has gotten me several houses.
Not only that but sometimes you see a house sitting and the pics make it look like garbage so you assume there's just no reason to look. GO LOOK. Pics can be very deceiving and you can really steal some houses that way. There are some houses that end up being really decent and, in terms of a rental, make for some great deal because there's some feature that puts people off that can be easily addressed.
Sometimes its no garage. Sometimes its because the cabinets are missing. I got one house strictly because the bathroom vanity was missing. The realtor said an owner occupant had an offer accepted on it before for about 20k more. The thing was missing a bathroom vanity so their lender said no way. The bank that owned the property then switched the offer criteria to cash only. Out by me, not many owner occupants doing cash deals and not as many investors either.
But I told the listing broker I wanted to do a rehab loan on and would they take that and the bank said yes. Put the bid in and got the house with rehab financing.
Funny part is the house was listed as a 3/2 but it was actually a 4/2. Another reason why taking a look at houses is really key.
But thats my process for finding a deal.
1) Watch your deal sources daily.
2) Go LOOK at houses. If you don't love to look at houses, you may not really enjoy being an investor. :-)
3) Put in your offers at numbers that make sense to you and to your source.
For instance, I won't offer 50% of the list price on an REO thats been on the market for 2 weeks. Thats just wasting time. But I might put in an offer at 60% of list price on a hud deal thats been there for 3 months. Or, say, 15% off list on a homepath thats in reduced mode.
As you start putting in offer and getting counters or deals, you'll start seeing the patterns. But every once in awhile I'll throw out a flyer on something too and it gets accepted. Only with the hud deals though since thats some crazy formula and doesn't require my realtor or me to do much - just enters a number and no signing of an offer unless that number is actually accepted.
Even then, I try not to be silly. I think I have their new discount patter figured out. We'll see. Interestingly enough, I think hud caught on too and they stopped countering so that investors would stop going fishing. :-)