The Simple 3-Step Process I Use to Land Amazing Real Estate Deals

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This topic has been discussed by so many investors on the Forums and written about on the blog by all of the blog contributors. I’m not one to miss a party so I thought I would “crash” it with my very own quick and easy process on buying deals.

As most of you should know by now, I own a turnkey real estate investment company that has over the last two years grown from a single desk in a commercial office complex hallway to now two 1,000 square foot offices, 12 full time staff members and operations in four different cities. “Humbled” would be an understatement of how I feel today.

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“The Journey is Always Better Than the Destination”

I mention this not to impress you but rather to let you know that I’ve been so busy meeting the demands of other investors that I literally have had no time to focus on growing my own portfolio. Ever single day I speak to a ton of investors from all over the world, and they regularly ask me questions like, “How many properties do you own in your portfolio?”

And what a great question that always is. I mean, how can you confidently sell something that you don’t own yourself? At the time of those questions being posed, I only had a “measly” three properties in my portfolio. It could have been a warning sign for many, but I genuinely explained that due to helping others out with their portfolios, I didn’t have time to focus on my own.

Today is a different story, and my goal for this year is to add 25+ buy and hold turnkey properties to my personal portfolio — and they all must be located in the same areas that we buy, fix, tenant and sell. I have already bought three properties this year that I’ll be keeping (to the disappointment of many investors), and below you will find the process on how I found, negotiated and evaluated these deals.

under-contract-deals

The Simple 3-Step Process I Use to Land Great Real Estate Deals

Step 1: Find the Property

This is quite easy nowadays, as my inbox gets flooded with deals on a daily basis. When people know you to be a true CIA of real estate, they will start sending you deals all day every day. For all of you starting out, make sure to network like crazy. Your network equals your net worth. Attend seminars, expos, conventions, and local meet ups — take it as far as asking grandma at Walmart if she knows of anyone selling.

Related: The One That Got Away: The Top 8 Reasons I Lose Out on Real Estate Deals

At a recent expo, I connected with a company that has sent me 1,400 properties in Ohio that they are foreclosing on in April and that will be available for sale. Also, make sure to stalk Craigslist daily (I bought 30+ properties on Craigslist in 2014), Auction.com, Hubzu.com HudHomeStore.com and the MLS (I know the MLS sucks, but sometimes it doesn’t, as you will find out below).

Step 2: Negotiate

To get started with this step, check out a previous blog that I wrote about getting to the lowest purchase price possible. This is my favorite part of real estate investing and business in general, as I was once told by a previous mentor that “the more mud you throw on the wall, the more something will eventually stick.” And I loved playing with mud as a kid. Although negotiating can be very nerve racking and emotional at times, emotion is EXACTLY something that you never want to show.

Commit to the numbers and commit to submitting offers daily. By submitting hundreds of offers every week, I was just able to snag two bargain deals off the MLS. Yes, the MLS. Can you believe that? I’m still pinching myself. I low-balled both properties at half of the asking price and bought them for 60% of the asking price.

You have to be “in it to win it,” and don’t forget that when negotiating, you always must be in the right space of mind and willing to walk away at any moment unless you get what you want. Don’t forget that real estate investing is about making money and gaining financial independence — not buying a pretty house that you would like to live in.

analyze-deal

Step 3: Evaluate

Last but not least, once you have hooked your bargain property, you now have to crunch the numbers and evaluate, making sure it’s a good fit for your portfolio. Because I’m so awesome, I’ve already written a blog about how to crunch real estate numbers using one simple rule. After you finish crunching the numbers like I explained in the article above, you MUST make sure that the net return on investment will be getting you a step closer to achieving your end goal.

Related: The #1 Tip For Recognizing Great Real Estate Deals

Don’t make the same mistake as me when I first started. I was investing for quantity and bragging rights, such as, “I’m a real estate investor” and “I’m an entrepreneur.” This cost me time and money, as I added properties to my portfolio that weren’t doing anything other than costing me dearly. Every property you buy needs to get you a step closer to achieving your end goal. Never forget that your decisions should be based on the numbers in the deal as they stand TODAY and not predictions of future capital appreciation. No one has a crystal ball, so forget about focusing on those metrics.

My ending questions to you today are: What is your end goal with real estate investing? How much monthly cash flow do you need to start living life on your terms? What is your time frame of achieving your end goal?

Investors: How do YOU plan on achieving your investing end goals? What does your property acquisition process look like?

Leave your questions and comments below!

About Author

Engelo Rumora

Engelo Rumora “The Real Estate Dingo" is a successful property investor, motivational speaker and serial entrepreneur that quit school at the age of 14 and played professional soccer at 18. He is also a soon to be published author along with becoming a TV personality in his very own real estate house flipping show. To find out more go to engelorumora.com . Engelo Rumora has been involved in over 400 real estate deals and founded five businesses in Ohio. The most successful is Ohio Cashflow, a company that specializes in providing turnkey properties in several Ohio markets. The newest venture is List’n Sell Realty, a real estate brokerage based in Toledo, Ohio and soon to be known as the #1 discount broker in the country.

12 Comments

  1. Alex Sanfilippo

    Great Post Engelo! Very helpful. I also read some of your related post:

    “How to crunch real estate numbers using one simple rule”
    “Getting to the lowest purchase price possible.”
    “CIA of real estate.”

    All 4 of these posts today were very helpful. I certainly learned something today!

    I think that we have very similar minds in the we approach and do business. I’ll certainly be reading through more of your posts.

    Thanks again,
    Alex Sanfilippo

  2. Mayank S.

    Good article Engelo!! Good to see how successful entrepreneurs like you are clinching deals. You dominate Ohio sector…BoomXX ..way to go and much success in 2016.
    We as investors in area with high price point barrier have to rely on TK so our bottom line may not be as frothy as yours that you hold in your portfolio but interested to know what numbers do you normally go after for the properties you hold in your portfolio if don’t mind sharing.

    • Engelo Rumora

      Thanks Mayank,

      Unfortunately, I wouldn’t be willing to openly reveal the numbers of my personal investments.

      There are too many individuals that are more focused on how much we as a company or I as the individual make rather than the actual value that comes with the property and the service provided.

      Too may times I’ve seen such mentalities. “I want it all, while you should have the minimum”

      And as you know mate, just one of the reasons why we are so picky with who we take on 🙂

      Also, it isn’t too difficult to dig into the county records websites to find what a property was purchased for.

      Thanks and have a great weekend 😉

      • Alan Mackenthun

        I doesn’t make much sense to me. Evaluate 1st, then negotiate, then complete your due diligence. If you’re negotiating before evaluating, you don’t have a lot of information to go on during the negotiation and it seems to me you’re negotiating in bad faith as you aren’t necessarily sure that you’re going to move forward with the purchase. Evaluating isn’t the same as due diligence. Due diligence means you’re confirming all the assumptions you based your negotiation on, but you shouldn’t expect to re-open negotiations unless something that was disclosed turned out untrue or something new is found that couldn’t have been known during negotiations such as info found during a property inspection.

        • Engelo Rumora

          Thanks Alan,

          No one should even be negotiating on a deal unless they have become a market expert and know the numbers of what is a great buy. My time is more valuable to me than anything else and as a company we do 15-20 deals per month. I don’t want my people inspecting a property until I know the exact price I can buy it for.

          I try to write blogs that are as short as possible and to the point without going into too much depth.

          I speak around the country and one topic I speak about is negotiating so feel free to attend any session and I give a good 1 hr spiel on my entire philosophy.

          It has much more in depth strategies than what is mentioned in the blog above.

          I’m not saying my strategy is correct but love stressing my opinion.

          Thanks 😉

  3. Alex Franks

    Engelo again well spoken. This year I am focusing on new construction builds . We signed on with one reseller that Kevin is handling the new builds (150 doors for them). We are doing a development with 24 homes in Fort Mill, SC. We’ve just annexed the land. Hoping to add in at least 5 lot builds per month. I am just focusing on our portfolio for the next few years. All this is being subbed out to a GC, resell company, commercial realtor, and local realtor.

    We went from 21 employees and now down to 3. I still have the large office which is 4500 sq ft along with huge bay side. Instead of having employees. I lease space to all the above people. So my over head is nothing. While we should complete 250 deals this year. Promise, I am not bragging. I think you have done an amazing job. My advice for you is to concentrate on your portfolio. If not your just turning deals. Trust me all good things come to end. If the market shifts you will be starting over. Been there and done that and that was after 250 turnkey flips in Charlotte, NC. Hedge funds purchased most of the product out there. I could have jumped into the Class C and D assets. I personally do not like them or would not advise buyers to purchase those. Again just my belief. I see investors making mistakes taking on lower class assets. I don’t care what anyone says- I am speaking from experience. This type of asset as Jay Hinrichs says, “is a recycled asset.”

    After the large commercial jobs, we jumped ship on turnkey. Went to retail sales only. Now jump forward to today’s market. Completion is fierce in buying and selling for retail side.

    So just be careful, and make sure you are building your own portfolio along the way.

    My goals this year, My wife and I are buying one condo in Myrtle Beach, SC. It will be a rental, but also for the family to use (during off season). Kevin and I will build 5 – 8 quads not for resale, but to keep (cash flow). Looking to purchase 100 – 200 apartment units this year.

    As turn key flippers, we know this business as good or better than any one. On the flip side, not many turn key guys have their own portfolio. As so much time is focused on the clients. So I made it a goal to invest in us this year. I will be more active in fourms and blogs, being my time is spent toward my own portfoilio. So a lot more time barely even look at homes now. Still doing a couple over seas trips (Hong Kong ) next. I decided to speak and meet like minded individuals in areas that my wife and I want to travel. The http://www.meetup.com is a great site for that. Instead flipping to investors, I spend time educating best I could and show by my own portfolio.

    • Engelo Rumora

      Thanks Alex,

      Yep definitely let my portfolio slide over the last few years so its time to ramp it up.

      Heavily looking for deals in Toledo right as we are slammed meeting demand in Dayton and Cincinnati ever since we introduced those 2 markets 😉

      Much success mate and speak soon.

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