Real estate has an old saying that money is made when the property is bought, not when it’s sold. The price at which you buy a property determines your future profits.
This is what I have found to be true in my own experience. All the best deals I’ve done started with purchasing a property at a great price that generated great cash flow and substantial appreciation with minor upgrades.
It can be hard to find properties for a fair price in today’s market. Properties that are listed at a good price often receive multiple offers above the list price.
These two factors were key to my rapid growth of my 22 apartment portfolio.
I found good deals that allowed me to refinance my capital and buy more properties.
Only one property can be purchased that is actually on the MLS
These are my top five tips for finding great real estate investments.
1. Tell your friends that you are looking
The first thing you can do to start building a source of leads is letting your social circle know you invest in real estate. You should post about real estate at least once per month on social media. This will help you to become the “real-estate guy” in your circle.
Although it might seem strange, this strategy is effective. I get regular messages from people I haven’t seen since high school asking if they’d be interested in making an offering on a property their friend has sold.
2. 2. Networking with top agents
A real estate agent who had a client that didn’t want their property publically listed, sold it to me and gave me the best deal.
This situation was unique in that there was only one other investor who was informed about the property. They took too long making a decision and were already under contract.
This strategy will only work if you do these two things correctly:
Establish trust with local agents so you can be a better partner
Clear expectations regarding your buy-box
Investors are always wary of real estate agents who work with them. They may be afraid to sign a contract with an investor that doesn’t have enough funds or get scared away by an inspection.
You can create a feeling of confidence and let agents know about past deals, which will help you build trust in your ability to close deals.
Agents should also know what type of property you are looking for. Agents may refer to you as “the guy looking at a great deal.” This is a pretty broad statement. You’re unlikely to be the first person they think of when they list a new property.
However, if you’re “that guy looking for a 4plex with one vacant unit he can house hack” or “that guy who wants to buy an apartment complex with 2 bedroom units between $500k and $1.3 Million” and the agent gets a property that meets your criteria, your phone will ring.
3. Contact Craigslist Listings and Rent Signs
This strategy helped me buy my first renovation. It’s simple.
You can check Zillow and HotPads if you spot a sign indicating a house for rent while driving through town.
You can find it online but not in your area. Congratulations!
Landlords who aren’t using the most popular listing sites to rent their properties are probably older or less tech savvy, which means there’s a good chance they might be looking to sell and avoid the headache of managing rental property and being a landlord.
Another great strategy is to search Craigslist for properties for rent, but not on other sites. Then call the owners and ask about a sale.
This strategy has been used in multiple offers, but I have yet to buy a property that I saw on Craigslist.
4. Driving for Dollars
Driving for dollars is a tried-and-true strategy that produces results. There are no other investors who can compete with you if you source your properties.
The strategy is easy: get in your car, drive around the neighborhoods you are interested in investing in, and then look for properties that are in disrepair.
Broken windows, overgrown grass, peeling paint and drooping gutters are all signs that a property owner is not paying attention to updates and may be considering selling.
You can either write the owner or find their phone number to send them a note to express interest in buying their property. Driving for dollars can also be a great way to find owners that might be interested in seller financing, so they can get payments for a long period of time
5. Establish a bird dog program
You can leverage your network to bring in business with a bird dog program. You can offer a bonus to anyone who brings you a lead.
Reach out to people you know who are interested in property. You can add great resources to your bird dog program by reaching out to your mailman, plumbers and roofers, as well as cable installers and plumbers.
Buying an investment property that’s a good deal takes a lot of work, but one thing is certain: you’ve got to take action if you want to make it happen.
Even if it’s only calling one “for rent” sign that you see driving by, you can take small steps towards your goal each day.
The hardest step in buying your first property is to buy it. It only gets easier. Keep going, keep trying, and you will reach your goals.