Finding real estate deals is hard – I can’t find ANY!
There’s nothing to buy out there right now…
There are no more foreclosures anywhere now, where are you guys finding all your deals?
It’s great that you can do all these flips, but I don’t have full-time “property acquisition managers” to do all that work for me…
It seems like every REIA meeting I go to, I get asked these same questions over and over again.
In fact, second only to the “how can I flip houses with no money” question, this is by far the one we hear the most.
Yes, it’s true that I do have a full-time acquisition manager and yes, I do have a marketing team to help me leverage what we are doing in my business…I cannot pretend to write here that I am doing all of this on my own. I simply couldn’t juggle eight property deals right now without the help of everyone on my house flipping team.
But when I was first starting out, I had the very same issues finding real estate deals.
Truth be told about six months ago, I was having the VERY same issues…my deal flow was starting to dry up and I was getting a bit…worried.
When I get anxious…is when I’ve noticed I take the most action.
But you can do it just as easily.
You can find the same kinds of great deals we do with just a few techniques that are super simple. It does take some work and it does take some time, but these techniques will be worth it for you.
How to Analyze a Real Estate Deal
Deal analysis is one of the best ways to learn real estate investing and it comes down to fundamental comfort in estimating expenses, rents, and cash flow. This guide will give you the knowledge you need to begin analyzing properties with confidence.
Finding Real Estate Deals With Absentee Owners
One of the best places to find houses to flip or to invest in is through finding absentee owners.
Why absentee owners?
Absentee owners are owners that are most likely out-of-state or out of the area. They may live in that town, but they are likely to not live in the house.
An Absentee owner is an owner of a property that the tax bill is being mailed to a different address. Be mindful that sometimes this will include PO Boxes, so sometimes you may be mailing to an actual owner. Absentee owner’s lists are a great potential source for deals because:
- If they don’t live in the area, they may have remote management issues that could be a headache.
- Many absentee owners are not aware of the market trends in the area and often times may not know what the property value is.
- They have a tendency to not be as aggressive in the management of the property and as a result may have not raised rents as aggressively to keep up with other expenses such as taxes and other expenses.
- Oftentimes, you’ll find absentee owners to have less interest in the property and have let the property decay. These kinds of properties are ideal for real estate investors.
- Many of these absentee owners who call us back after we mail them tell us that they had originally planned to move back to the area someday, but now their plans have changed and they just haven’t had the time to consider selling. If this is the case, we can help them to solve their problems as well as get a good deal for us and them in the process.
Bottom line is this: If you can acquire a list of absentee owners, you’ll have a very solid list of potential sellers who may want to sell you their property and give you a good deal.
But how do you find absentee owners?
The Power of MLS and Absentee Owner Lists
As mentioned many times here on Bigger Pockets, your real estate agent is an extremely valuable part of your real estate investing team. And when it comes to finding absentee owners, this team member becomes even more important to you.
If you have your real state license and have access to MLS, then this is even easier as you can do this yourself.
However, if you don’t have access to MLS, contact your real estate agent and show them the video above.
Here’s how to do it:
1. Log into MLS: Have your real estate agent log into the local MLS and pick a town to search in. In the video, we pick Plymouth, Massachusetts.
2. Modify Search: Then search “Absentee Owner” on the drop-down menu which is on the left-hand side on the MLS in Massachusetts – for your state it may be different.
3. Select Parameters and Add: In the Advanced Search drop down, choose the properties most desirable for you – example, 2 bedrooms, 2 baths, etc.
4. Hit Search: Once you have your parameters set, hit search. You’ll then see a list of all the absentee owners in that town. For us, it was over 11,000 results. That’s a lot of results. Bear in mind this also includes land owners as well.
5. Transfer to Excel: With MLS, you can separate in state and out-of-state owners by sorting by that column. Download the entire list to an excel file. This file is now your working list of the owner names, property address, mailing address and all the super important information you’ll need to send out your mailers.
This list is the file your real estate agent will then give to you. The rest is up to you.
6. Sort by State Owners: If you can eliminate owners who are living in the state you are searching in – this way you’ll cut down drastically on anyone absentee owners who may have property but live locally. We’ve found that these potential sellers are less likely to be interested.
6. Mail Merge: Take those mailing addresses in your excel spreadsheet then mail merge them in to the Microsoft word mailing template. You can mail merge to print on your address labels or on your letters you send to potential sellers. For us, we use this to print out letters or postcards, but we pay someone to hand write the addresses on the envelope or the postcard itself. We’ve just found our open rates are much higher when we mail with a hand written address on the front.
7. Mail Away: Print out all your labels from the mail merge and slap those address labels on your cards. Once you have all your letters done, it’s off to the post office you go….marketing campaign begun!
8. Rinse and Repeat: Once you’ve mailed to your list, you’re not done. This is because most people will not be interested and most will not do anything to take action until the third, fourth or even fifth mailing. In fact, in the past three months, we have gotten two deals from mailings like these. One on the second mailings we did netted over $35,000 and another on the second mailing which will net us (when it closes), just under $29,000.
Yes, that is profit…
Suffice to say, once you do that first mailing, don’t stop. Keep going and keep mailing, it’s really worth it in the end…
Absentee Owners Deal Finding Conclusion
Are the above steps time-consuming? Sure, they are.
This is why you can outsource all this as well. We have a number of places where we outsource this task from college kids to sites like Odesk.com.
And like I said, we don’t stop at just one mailing. We usually mail these leads a postcard once every three months – rotating the towns we are targeting until we uncover the buyers who are ideal for us.
So is it more challenging to find properties now? Sure is. But all that means is you have a work a little bit harder…and a little bit smarter to make it happen.
Chances are, your real estate competition in your area is likely not performing all these steps…but you will be.
If you made it this far, leave a comment below! What do you think? Are there any absentee owner strategies you’ve found particularly helpful? Leave a comment below and let us know!
Photo: Universal Pops