Finding real estate deals as a newcomer to the industry may seem like a challenge. However, anyone with the desire to work hard will find them because there are always real estate deals out there waiting.
There are two primary ways to find deals. The first way is to find deals on your own without anyone else’s help. The other method is to enlist help by using the skills of others.
Here, we’ll discuss finding deals without anyone else’s help.
In starting his journey toward becoming a real estate investor and entrepreneur, Graeve was unable to find any real estate deals for the first several months. He listened to podcasts and read as many books as he could and even attended local meetups, but he wasn’t able to find any deals.
He knew there were sellers out there who could offer him the best deals in real estate, but he realized he wasn’t going to find them on the Multiple Listing Service (MLS), which is a popular nationwide tool that listing brokers utilize. He also wasn’t going to find motivated sellers on internet-based listing websites like Trulia and Zillow.
What he realized was that truly motivated sellers weren’t going to list their properties because they were experiencing difficult or immediate life events that were causing them to want to sell their property fast. They were also going to be sellers who were owners of distressed houses.
Some of the difficult or time-sensitive life events experienced by motivated sellers include job relocations, death, sickness, loss of a job, divorce, and foreclosure.
For example, a landlord might not want to deal with the responsibilities of property ownership and wants to get out of the real estate business as soon as possible. Or, a real estate investor with interest in renovating or flipping a property isn’t able to raise the funds necessary to complete the project.
Distressed properties and houses may also take other forms. Sometimes, a house has experienced water damage or has been examined and found to have structural issues. Other houses may have been untouched for the last 50 years and have become rundown or in sore need of a complete renovation.
How would a motivated real estate investor find these deals?
The first method for finding real estate deals is to call the numbers on “For Rent” signs that have been posted by an individual person and not a corporation or a property management company. You may ask the landlord if he’s interested in selling because he might be tired of renting the property.
The second method is to purchase a list of people from listability.com. You can then send letters to the names on the list and offer the owners a fast-cash offer for their property. You may find success in sending letters to a very targeted and specific group of people.
For example, Graeve once sent out letters to owners of houses in a single neighborhood who were over the age of 55 and who had at least 50 percent equity in their homes but were residents of another state. Those owners could be motivated to sell because they’re older and no longer interested in acting as a landlord.
You may only get about five responses when you send out as many as 100 letters, but experience will help you increase your response rate. You’ll develop successful marketing styles and begin to learn what types of letters to send out to certain groups of people.
One of the best reasons to use this method is that it’s not just appropriate for real estate investors. It’s also an option for people who want to buy a house for their own enjoyment but want to buy the house at a significant discount. A friend who took Graeve’s recommendation on sending out letters to a list was able to secure three contracts using this method.
The second method is to purchase leads online from various websites. There are sites like www.webuyhousesfastfair.com, which allow you to purchase leads for $100 to $200 each. This method is appropriate for anyone who has some money on hand that may be used for finding real estate leads because it can cost hundreds of dollars. However, the payoff may be in the thousands of dollars.
Finding people who are in pre-foreclosure is another method. You can find the names you need on local government websites and knock on doors. If you’re able to act as a genuine and understanding salesperson, you may find success with this method. You may want to find an investor to help.
The final option is buying from foreclosure auctions. You need to have enough cash on hand on the day of the auction, and you also need to feel comfortable making the purchase without seeing the house beforehand. This method is usually best for those with some experience.
Joe Graeve and Chris Graeve, president of RE-build Properties, is always interested in connecting. Please contact Christopher Graeve on LinkedIn.