The #1 Little Known Way I Find Cheap Real Estate Deals

by | BiggerPockets.com

For those of you who don’t know who I am, I’m proud to say that to date, I’ve been involved in over 500 real estate transactions. I was able to acquire all of the properties using various strategies, but one in particular that I really like to talk about is using Craigslist. In 2014, over the span of about five months, I was able to acquire 34 properties, and I did it by stalking Craigslist every single day. For breakfast, lunch, and dinner, I was stalking Craigslist.

How to Find Deals on Craigslist

Now, what you have to do is first have enough capital to acquire a property with cash because a lot of the properties listed on Craigslist are very distressed, rundown, and may have back taxes or a tax lien. So, you have to have the capital to be able to buy and close on them quickly because you probably won’t be able to get a loan.

Another thing you need to do is immerse yourself in everything in your particular target area. Within your zip code, you should know what un-renovated properties are selling for, what renovated properties are selling for, the prices that wholesalers list properties for in that area, who the top performing real estate agents in the area are, and who the top real estate investors flipping deals in the area are. Your network equals your net worth, so make sure you immerse yourself with the numbers and surround yourself with the right people so you truly become an expert in that particular area or zip code.

Related: The $30k Rental Property: How to Finance & Profit From Cheap Real Estate

So, first, we have the capital, meaning we’ve got the cash to acquire the properties. Second, we have immersed ourselves in the numbers of that particular area so we understand the ins and outs and have enough information to make an educated decision. Then, guys, you have to stalk Craigslist just like I did. Log in and check it because there will be deals that pop up. Once they pop up, because you are a true expert in that particular area, you’ll know if it’s a good deal. Then, pick up the phone, call the seller, and ask them a series of questions. Your goal is to find out the absolute lowest price they are willing to take for that property. Remember, you’re an expert in that area, so you understand what that property is going to sell for one day if you fix it up.

Next, go and check the property out. If it meets your rehab estimates and you can make a significant profit on that particular transaction, buy it. You’ll be able to close as quickly as possible because you have the cash to do so. That is how I was able to acquire 34 properties in 2014. I knew the numbers in the area, I had the cash to make the deals happen, I was good at negotiating, I worked hard, and I stalked Craigslist every single day. A deal popped up, I was on the phone, I inspected the property, I committed the down payment, I called the title company and signed the contracts, and I closed on the contracts within seven days. Then I started the renovations on it and sold the property for a profit.

I hope this little-known strategy helped you today. If you have any other strategies that you use to acquire properties, I’d love to hear them.

Please comment 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.

10 Comments

  1. Curt Smith

    Key issue Engelo mentioned that I suspect new folks stopped thinking as they churned on the LEAST important issue mentioned of having cash to close,,,, cash will find good deals, the most important thing said by the always top advice and help giving Engelo is: know your area like the back of your hand, deeply, you know ALL the agents, all the other investors, you stop at all the dumpster houses to meet those investors (future buyers) you even go to the neighborhood meetings and listen. …

    When you know your area you can jump on what you know is a deal in seconds, not hours or days! Think like a wholesaler, put the deal under contract and shop to assign your contract OR shop for hard money to buy the deal yourself. Hardmoney lenders are just like buyers, they love to lend on really REALLY good deals… 🙂

    Great video Engelo!!!

    • Engelo Rumora

      Thanks for your comment Curt.

      It is crucial becoming a market expert and knowing your numbers.

      We are closing on 17 deals this month based of looking at a peace of paper and getting our in-house project management to take a quick glance.

      Time is of essence in securing a great property.

      Much success

  2. dave laqua

    Another element of the “cash” deal is the ability to close rapidly. I have negotiated and closed deals in 2 hours….I waive the survey especially if its a city lot, I do my own inspection AND i interview the existing resident/ tenant ..they know better than anyone whats wrong with the home. I have a standard boiler plate warranty deed that covers me every which way but loose and puts the property into a series LLC….i make one stop at the county and go back on computer 5 years for liens ( past our 2 year statute) . We meet at the lawyers office , notarize the bill of sale, and warranty deed and the seller walks out the door with a cashiers check paid in full. ….My lawyer charges a flat 250.00 for use of his office and paralegal/ notary . The closing companies, title companies, inspectors, surveyors have built themselves a little empire and they have to report all transactions to the IRS, your attorney doesn’t – why wait to get screwed???? Never ever had an issue-

  3. Jeff Dimock

    Dave, so it sounds like you don’t bother getting title insurance? In our area (Atlanta), the city can take 10 days to give a closing attorney water bill status. If you close without getting that, you could inherit thousands of dollars of water liens that aren’t in searchable public records. And without title insurance, you’re subject to an unscrupulous seller having taken out debt on the house immediately prior to closing that wouldn’t yet be public. These type issues are why I never understand how someone can close in a day or two, let alone hours. Am I missing something?

  4. Daniel Severin

    Engelo,

    Thanks for the post! Great info! Were you truly using Cash that was your own or hard money last year? If your own cash, how did you get to the place that you had enough cash reserve to have what you needed for all of your offers?

    Also do you use a local or national title Company? I had a pretty terrible experience with a national company recently.

    Thanks!

  5. Peter Debs

    What I’ve found is that there is sooooo much cash out there that you not only have to be the early bird and get your offer in quickly, but you have to stand out and be willing to take some risks. One strategy that is working now is to make hard offers with no inspection contingency. Obviously doing your homework is critical and you are still taking risk.

  6. John Barnette

    Like all the comments. I would add that this is all very market dependent. Small town Ohio and it works ( not dissing on Ohio, went to college there and lived in Columbus for a few yrs in the 90’s ). But in a very competitive market like the coasts , Denver, Dallas, etc. You may find a possibility with lots of fishing and luck. I would add FSBO on Zillow as well. The market is just way to competitive currently for such strategy.

    I did find anew absolutely home run deal back in 2012 that was actually listed by an agent. But not a local agent and on local MLS. A “short sell specialist” from an hour plus away and different MLS. Swooped it up from seeing in only on Zillow and functionally marketed as well as a FSBO.

    Be happy that it works in your market. Obviously you are doing very well. Bravo.

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