I read a statistic that only 8% of New Year’s resolutions are ever carried out.
That’s almost nothing.
But those other 92%? They probably didn’t have BiggerPockets to help them along.
Granted, we’re not going to do very well in encouraging you to lose weight or stop smoking. But we CAN help you get your financial house in order.
According to this article of the Top 10 Broken Resolutions, “Get Out of Debt/Save Money” comes in at number 5.
What were your resolutions for 2017? Wait, let me guess—buy more properties!
We’re a real estate investment site. Everyone here wants to buy more properties this year to help them get out of debt, grow their wealth, and become financially independent.
In today’s hot hot market, there’s a LOT of competition to buy a house. My own market is one of the hottest in the country, with properties selling almost instantly, for over asking price, all cash, and no contingencies. They close in 10 days or following the seller’s timeline. A new investor who may not have 10,000 deals under his belt can get intimidated pretty quickly and lose out on a lot of deals.
It doesn’t have to be that way.
What does your marketing plan look like? How many letters are you sending out every week or month? Are you sending multiple mailings to the same list? Five touch points are generally advised, so if your mailings are one-and-done, you could be missing out on leads.
What does your mailing say? Are all the words spelled right? How many ways are you giving them to contact you? I like to give phone, email, and street address when I send a letter. You never know how someone prefers to contact you. Don’t decide how they can connect; let them choose the way they are most comfortable.
Are you sending the exact same thing every month? Marketing experts suggest switching things up—send a letter one month, a postcard the next. You don’t know what’s going to catch their eye and make them call.
Related: The Comprehensive Guide for Financing Your Very First Real Estate Deal
If letters aren’t in your budget, how many doors are you knocking on? I go on a walk with my family just about every night. I take my phone with me and take notes as we stroll, looking at ugly, obviously abandoned, or otherwise appealing-to-me homes. I write the address down and look them up in the public records when I get home and send personalized notes to anyone who’s lived in the home for a significant amount of time.
This tweet from The Broke Agent gives some pretty awesome advice:
While he meant it as a joke, it’s actually pretty clever. It doesn’t even have to be YOUR dog. Ask a neighbor or friend if you can take their dog for a walk. Dogs love walks.
I’m very fortunate to have two meetups in my local area, plus another one about 45 minutes away, and yet another 90 minutes from me.
I’ve met some pretty amazing people at each of these meetups, and the face-to-face connection cannot be matched. Deals happen all the time, and most often when you least expect them.
Hearing other investors tell how they did this or that is so inspiring. As I’ve said, my market is ultra-hot. Finding deals takes effort, and they run on the thin side since owner-occupant retail buyers are bidding on these same properties.
But at a recent meetup, Bill S. shared how he bought a duplex, split the property, and sold each half with a separate title. Not a groundbreaking idea, but I’d never considered it before. (I don’t want to buy half of a duplex; why would anyone else?)
Another investor has shared her rent-by-the-room strategy that pays off in spades for her. I had also not ever thought of investing in this manner, but she’s making an excellent return in an otherwise difficult market.
Networking with other investors can also yield deals. Properties that do not work for them could be offered to you. I had a lead on a meth house that proved to be too much for me to handle. I passed that lead on to another investor I met at our local meetup, as he has more experience with these difficult deals. Unfortunately, it didn’t pan out for him either—it was a really big mess involving a reverse mortgage, liens, and drug contamination. But I now have another person to go to with difficult issues, simply because of a conversation I had with him over a beer.
During the deal analysis, he discovered that this particular property WAS a great deal, and as soon as he was done with the webinar, he called his agent to write up an offer.
When you’re first starting out and having difficulties finding properties, run the numbers on any deal that looks interesting. If the property is listed at a price that doesn’t work for you, figure out what price WOULD work. Look for improvements you can make to the property to make the numbers work. Keep an eye on the property.
Another fellow investor I met at our local meetup is also an agent. She said that in our hot market, up to 25% of properties are falling out of contract due to appraisal/loan qualification issues.
Picture this: You have a property that you feel would work for $200,000, but the accepted offer is for $225,000. The appraisal comes back at $203,000, and the buyer and seller can’t make the deal work. Normally, this property would simply go back on the market and you would have to compete with all the other buyers again.
What if you submitted a backup offer? Perhaps you could avoid all that competition. My fellow investor has picked up numerous deals by writing backup offers. As an agent, she’s writing her own offers.
Related: Investors: Don’t Compromise Your Numbers Just to Buy Deals in a Hot Market
Think Outside the Box
This is one of the dumbest, cliche phrases, yet is still excellent advice.
If you always do what you’ve always done, you always get what you’ve always gotten. If you do the same thing as everyone else, you’ll get the same results they’re getting.
Think outside the box. If the numbers don’t work as a flip, would they work as a rental? Would it be better to tear the whole place down and sell the lot to a builder? Can you buy an apartment building and turn it into condos? Are the condos unwarrantable, knocking out owner-occupant retail buyers?
If you don’t have enough money to do the deal yourself, can you bring in a partner? Can you use a HELOC to finance the deal? Does your uncle have a pile of cash sitting in the bank making .1% interest?
Have you considered notes and liens? If you keep missing out on deals, can you take your money and lend it to another investor?
As I have already stated, my market is too hot, and I simply cannot find deals that make sense. So I have found an investor in another part of the country who DOES have great deals available, and I lend my money to him. We both win, and I’ve found another way to grow my money.
Isn’t that what it’s all about?
What creative strategies do you use to find deals when they just don’t seem to be out there?
Let me know with a comment!