All Forum Posts by: Sarah Hansen

There's a few different ways to find off market properties. One way we've found if you're trying to snag a smaller unit (duplex, triplex or 4-plex) is to call off for-rent listings and signs. You can drive neighborhoods, check Craigslist / Zillow and get your realtor to send you rental listings from the MLS as well as the active for sale listings. Sometimes, you catch a landlord that doesn't really want to go through the entire tenant-screening process again to fill their empty unit, and is willing to sell. Maybe the last tenant moved out and left a mess, and they are fed up. You never know! You can try it with bigger units too, but those guys usually have a few more people to get through before you can actually talk to the owner. You get varying levels of motivation with this approach, but in our experience, many people will at least say, "Make me an offer."

You can also call property managers and see if any of their clients are thinking about selling, and if so, that you'd be interested. They probably won't tell you anyone upfront, but if you leave your info they may pass your name along if they know of someone considering it, especially if they think you'll continue to use them to manage the units. 

If you have a target area, you can also write down addresses of multifamily units you like, then do a bit of digging in property records for owner addresses and equity. Then, send mailings out to owners with decent equity telling them you want to buy their units. I know there's also lists you can buy, but we haven't tried that yet. 

Finally - and you have to have the right realtor for this - get your realtor to send you expired / withdrawn listings of past multifamily properties. You know, at least at one time, that the owners wanted to sell. Now, you need to do some digging to see if the same owners still own the property, or if they sold it off market, which the MLS wouldn't record. Use these listings to develop a direct mail campaign. This is a great way to find some off-market leads. If you want to create a win for your realtor, since they sent you the leads, you can have them get involved in the transaction to make a commission. If you don't want to offer this, you can at least tell them that if you get in touch with the owners, and they aren't willing to bite at your price but are still interested in selling, that you can recommend your realtor to get the listing if they want to try again. If you've been working with a realtor and have given them other business, they may just pull it for you without issue. It's not very hard for them to pull this list... This is one of the reasons my husband became a realtor, so we had easy access to this stuff for our own investments.

Good luck! 

If you're looking for an investment-friendly realtor, my husband could certainly help you in your search. He's worked with several investors, and we invest in flips and new development ventures. We looked into house hacking personally for a time, (duplex up to fourplex) before finding a good deal on a single family and opting for that route. Just let me know if we can be of any help.

@Joe Splitrock I hear you, and I know exactly what he's suggesting. I had no idea it was such a hot button and won't make that mistake again. I don't ever plan to be a landlord... I have other investment ventures I enjoy and feel give me a better ROI. But I do listen to trainings and ask my landlord friends about their personal experiences. We've found properties for landlord buyers with great cap rates. Again, I will repeat myself until I am blue in the face - because no one seems to be hearing me - than I was agreeing with the eviction, but also mentioning another tool in the tool belt. People have taken that and run with it that I was only advocating for cash for keys, because that makes their position better. And we all know when we debate online how we love to pick and choose what to react to instead of truly trying to understand the other's mindset. It's like people can't focus on the fact that I agree with them, that we do have common ground; but they also have to crush the other thing I brought up because there's only one way and even mentioning another way makes everyone's ears bleed.

I have several friends who are landlords who have used cash for keys successfully. It was a win / win for everyone. I'm going off their personal experience, as well as Brandon's blog. To each their own. I don't mind if people don't agree, but some people's "gotcha" questions (when I have been very transparent about my real estate experience), saying I'm a newbie that has never done any deals, talking about "training" the tenant, and telling me I'm giving flippant advice to blow OP's money because I don't personally invest in that particular niche are in poor taste. My crime was bringing up another strategy that's obviously been utilized successfully by landlords - including Brandon. People can say they don't agree. That doesn't bother me a bit. We can respectfully debate the ideas. Just don't make it personal, because then I tap out. Also, my husband and I have needed to rent in the past, and I would be frustrated knowing landlords felt the need to talk about training me like some sort of mountain cur. Talking about tenants in that way is a very elitist mindset, and further help me determine when someone is not worth my time. 

Maybe it's just me, but I like to know about more than one strategy just to broaden my knowledge base. Hearing another way is always welcomed - even if I don't agree with it. I'm certainly not going to waste my time defending this strategy further. I need to be working on my business, not arguing on the internet - which I normally avoid like the plague because no one ever changes anyone's mind and it just turns into a battle of the egos and a massive waste of time. :) OP has the info she needs. Being baited into another debate where no one benefits is not the way I want to spend the rest of my evening. Instead, I'm going to put together a potential seven-figure ARV flip deal analysis for an investor partner and enjoy my night. Life is good! We can all move on now.

Thanks for engaging me respectfully, which is why I took the time to write back. I do appreciate your perspective. Have a great evening! 

@Ralph R. Wow... thanks for making assumptions. I'm certainly not claiming to be an expert in rentals, but I'm not a "newbie or don't have any deals." We've done one buyout deal (similar to a wholesale), are about to list our first full renovation flip next week, and are just finishing demo on our second flip. We also have six lots we are building new homes on in a subdivision. And, we are finishing quiet title action on three more lots that we bought at a tax lien sale and will develop once title is clear. So, that's 12 deals if you were counting. 

If you bothered to actually read what I wrote, I said, "You could start the eviction process, or just offer him cash for keys..." This means that I agree that going the eviction route is a great strategy (option A), but here's an option B if you wanted to consider it. Since the eviction was being covered by others in the forum, I fleshed out option B a bit more as no one had touched on that yet. I'm certainly not trying to make her lose money or being flippant because my cash isn't on the line, I'm just explaining a second tool in the tool belt. Take it or leave it. If she's not comfortable doing it, and it sounds like she's not, that's totally fine. Option A is a great way to go! 

I guess I have a different perspective, but when looking for flip deals, we walk through a lot of properties and see what happens when people leave rentals mad. Just last month, we were in a property where they punched out every single wall, then for good measure, got a broom handle to pepper the ceiling with holes. There wasn't one flat service that didn't have the imprint of a boot, fist, or broom handle in the drywall. They also stole the AC condenser unit outside. People pour concrete down the toilets to ruin the plumbing or overflow the bathtub to flood the house. In the flipping business, this is our reality. Sure, the judge can award the landlord damages, back rent and court costs, but if the tenant quits their job and skips town, they can't garnish their wages and may spend more in attorney fees trying to get blood from a turnip. Cash for keys gives a better shot at getting the property back in rent-ready condition vs stepping into a nightmare in cleanup and repairs while trying to chase down a tenant for what is owed. And who gives someone three weeks to move? I would say no more than four days max to get out of there. 

Finally, argue with Brandon Turner over the cash-for-keys strategy, or say that he hasn't done any deals. He's an advocate for this strategy as stated in his blog: https://www.biggerpockets.com/renewsblog/cash-keys...

You could start the eviction process, or just offer him cash for keys to just move out on his own. Tell him a move-out date that he must be out, and if you show up on that date, all his stuff is out, house has no damage and is in broom-swept condition, you pay him x amount of dollars to give you his keys and leave peacefully. Then, change the locks immediately. This keeps people from destroying property while you go through the eviction process. Banks do this all the time with foreclosures as it's usually cheaper and faster than paying an attorney. You also don't have to worry about angry people punching in the drywall and leaving you with thousands in damages to the house. Finally, it gives people going through a tough time some moving money or cash for a deposit on a more affordable rental. But yes, either give him a move-out date (not very long) for a cash-for-keys deal (get the agreement in writing and signed by both of you) or start the eviction. It's obvious his life has changed so that he can't afford your rental and needs to leave.

@Jay Newman Yes, the MLS listing usually go to Zillow / Trulia after listing, but they can sometimes be a day or two behind. So, the really good deals often go pending before they hit Zillow or Trulia with realtors monitoring the MLS. It's a competitive market, and really good bargains often have multiple offers within the hour. If you have a realtor sending you targeted listings daily, you should be in good shape. You can even request that they set you up to receive them morning and evening of the same day to stay even more current.

When I get a chance, I will send you a couple of investor friendly banks and a dynamite broker. It's wise to shop your loan around a bit to get the best financing option. And yes, whomever you finance with, get a pre-qualification letter to use in your negotiations. If presented with multiple offers, most sellers go with the guy that has proof he is already set up with financing to close on the loan. It makes you more competitive in this market. 

If it were me, I would probably sell and use that equity to get things moving in a new market. We live and invest in Northwest Arkansas, and it's an amazing area! If you get the price you want for your property, it sounds like you'd have a nice nest egg to get started investing over here where you have boots on the ground.

If you need any connections getting started, we are plugged in down here and can recommend some great people. We also have an awesome REIA group that you should check out and network in.

Here's the local REIA website: http://www.rei-nwa.com/

Message me if we can be of any help!  

And welcome to Arkansas! Looking forward to meeting you! 

I think direct mail marketing is a great idea to acquire rentals. I don't see any issue with this as long as you don't make promises you can't keep. Another strategy, if you want to house hack, is to wait until a unit comes up for rent and call the owner to see if they are interested in selling instead. Do you have a realtor sending you multi-family listings on the market now? There are quite a few that come through all the time, but the good deals are snapped up pretty quickly. If not, get on a realtor's auto email list to send you properties as soon as they hit the market so you have that acquisition strategy as well. You can pick up some nice deals, as long as you're willing to put in a little elbow grease. Pretty rentals go for top dollar, but some just need a bit of updating and then you can increase rent. Finally, are you already prequalified with a lender? I'm sure you probably are, but if not, do so. No one likes paperwork, but it will make your close so much easier and you'll be more competitive if you put that pre-qualification letter in with your offer. My husband requires this of all his investor clients so he doesn't take them to properties they can't close on. Message me if you need some good lenders to get you set up. We know of several that are investor friendly in the NWA area. Good luck!

Not to muddy the waters, but I just found this while researching it a bit further. This website says there isn't a cap in Arkansas on buying and selling. I don't know how old or reliable the info on the site is, but it's tough with so much different info out there. I remember reading on BP forums the one-per-year rule, but other sites say differently. 

https://www.mobilehomeinvesting.net/mobile-home-license-per-state-how-many-can-you-buysell-per-12-month-period/

That's why I'd talk to an attorney to stay on the safe side. If you know of a good resource page for Arkansas on this stuff, with updated reliable info, I'd love to know about it. 

No, I didn't mean to say that... sorry for the confusion. Straight up cash sales would certainly fall into the buy / sell criteria. I was hoping that an owner finance could get around it. But, they would probably count those too. I fully admit that I need to learn more about this and talk with an attorney to make sure I'm thinking about it the right way. However, if you need to fill pads and make them profitable, and it's tough to get people to move there to just collect lot rents after marketing and offering incentives, worst case you could buy mobile homes and rent them out to make the pads performing, and then slowly convert the rentals to owner occupants over the years as allowed.