It ALL Starts with Deal Flow

General Real Estate Investing
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It ALL Starts with Deal Flow

Don KonipolBusiness Member
Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes

Whether you’re investing, buying, selling, brokering, or are a service provider in real estate your degree of success is dependent on DEAL FLOW. And while deal flow without the other skills, knowledge and work necessary won’t by itself guarantee success, without significant QUALITY deal flow success is unattainable.

Having a significant number of QUALITY deals coming in (or its equivalent “leads”, “prospects” inquiries” etc.) allow you to operate in a manner that leads to much higher profitability. Specifically, having a high volume, high quality deal flow allows the recipient to

  1. Buy property at a higher ROI or sell at a larger price or charge a higher amount for services

  2. Avoid dealing with “marginal” deals or clients

  3. Spend energy on identifying, pursuing, negotiating and obtaining the most profitable transactions

  4. Bid more advantageously as many more options for transacting are available

  5. Identify the true optimum pricing for maximum profitability

  6. Walk away from transactions where the other side is going to be a problem and too much aggravation

Do you deal with low, medium or high deal flow? How do you obtain your deal flow?

Here are the methods we use to generate our deals flow of borrowers for our private mortgage financing; note sellers for commercial mortgage acquisitions, and seller of equity interests in commercial property

  1. SEO

  2. SEM

  3. Social media marketing

  4. Listings on hard money loans websites

  5. Listings on commercial mortgage websites

  6. Direct email monthly to 10,000 + mortgage brokers, bank special asset managers, real estate investors, and financial intermediaries on our email list we built over 13 years.

Private Mortgage Financing Partners, LLC
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  • James JonesPro Member
    Investor · Collierville, TN 38017 · Member since 2017 · 842 posts · 604 votes
    2w

    High volume, low close rate. That's the only way I know.

    I buy sub-$100K single-family houses in Memphis — 38109, 38111, 38114, 38116, 38118, 38122, 38128 and the rest. Wholesalers are my main pipeline. I tell every wholesaler exactly what I buy: 3-bed, under $100K purchase, needs work I'm set up to do.

    My bottleneck was never money or contractors. It was always deal flow. So I treat sourcing like a job: wholesaler relationships, driving for dollars, and I never put earnest money down — if the numbers work at my offer, I close.

    Here's the math that keeps me honest: most "deals" that come across my desk don't hit the 1% rule or my rehab math, so I pass on 9 out of 10. You need the flow to find the 1 in 10 that works.

    How many offers are you writing a week? That's your real deal flow number.

    1Reply
    • Don KonipolBusiness Member
      OP
      Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
      2w

      James, you’ve broken down the math very well. I see so many wanna be investors/wholesalers/flippers etc do everything BUT try to make a deal/sale/purchase. A friend of mine wanted to set up a company to acquire surgical centers. The first things he did was purchase a $120,000 Mercedes because “ you’ve got to look the part” and spend $4500 setting up a pension plan. Before he ever identified one potential property for purchase, before he ever contacted a broker, seller, or did any promotion, marketing or sourcing.

      People want to do the easy stuff first; second they want to do the “fun” stuff; only after all this do they think about doing the NECESSARY stuff. 85% of the time they’ll establish a registered entity, apply for all permits and licenses, set up bank accounts, vendor accounts, print business cards, build a website, purchase office supplies and equipment, engage attorneys and accountants, and never do one deal or make one sale.

      The second point you bring up about identifying your “buy box” is equally important. Most unsuccessful or marginally successful investors either chase any deal that is “easy” to access or set criteria so stringent that NO deal will ever be consummated.

      Private Mortgage Financing Partners, LLC
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