Where to Find Great Deals for Real Estate Investing

searching for real estate deals

In today’s market, you need to know where to find great deals for real estate investing. There is a common misconception among newer real estate investors that the only place to find homes for sale is on the MLS (or multiple listing service).  While it’s true that the MLS usually holds the most amount of listing data in any given area, it is definitely not the only way to find homes for sale.  Acquiring a property that is “off market” (not on the MLS) is possible with a little creativity.  Often, these properties are sold at a discount, whether that is because the seller values a quick sale over top dollar, or because they find themselves in a situation where they can no longer afford their home.

Though it may take a more thoughtful approach, finding off-market deals is totally possible.  On one of my other deals at 2002 Technology Woods (part of University Woods near NC State University), I got that property under contract through networking with a real estate agent who happens to be an investor as well.  Since she not only owned one of the units at University Woods but was also on the HOA board, she was able to get in touch via email with many of the current owners and ask if any had been thinking of selling.

Sometimes, even if an owner isn’t actively planning on listing their property, being approached by a buyer is enough to get them to consider it.  This is because they don’t have to go through the trouble of finding a listing agent to help them market the property (in order to attract buyers), and thus can save on the fee that a listing agent typically would charge (around 3% of the sales price).

On this particular deal, after hearing from 8 or so owners who said they might be willing to sell, we verified all the pertinent details about their properties such as the age of the hot water heaters and HVAC units.  All of these units are functionally the same, as they are set up suite-style with either 3 bedrooms and 3 bathrooms or 4 bedrooms and 4 bathrooms.  Based on the age of the systems (and their estimated longevity), we were able to make preliminary offers on the properties, and we ended up agreeing to terms on one quite easily, with two more following suit a week or two later.

The point of me sharing my story here is that I want potential investors to know that the MLS is not the only place to find deals.  The key is to network strategically and get to know the folks that handle investment properties on a daily basis.  Here are a few other groups besides real estate agents that it could be very useful to network with:

Property managers

It’s pretty self-explanatory, but a property manager (PM) handles all aspects of renting a property out, including finding and screening the tenant, collecting rent, coordinating repairs and paying bills associated with the property.  Many investors who would prefer to be “hands off” use PMs.  Since they are typically quite actively involved in maintaining the property and finding tenants, usually the PM will be the first to hear if one of their investor clients is thinking of selling. 

Wholesalers

Though this is not as well known to those not actively involved in real estate investing, wholesalers scout out properties that are typically in distress or in bad circumstances (and thus can be acquired at a discount).  However, where the “wholesale” part comes into play is that the wholesaler enters into an agreement with the seller of the home to buy the property – but rather than close on the deal himself/herself, they then assign (re-sell) the contract to an investor.  Without an extensive network of property investors, wholesalers wouldn’t be successful… so many would be thrilled to add more investors to their “buyer’s list”!   

Members of a local REIA

REIA stands for “real estate investor association.”  Many regions have one, as a way of bringing the real estate investing community together for networking and dealmaking.  TREIA (the REIA here in the Triangle area of NC) is 600+ member strong and has a diverse network of investors from true beginners who are looking for their first deal to seasoned veterans who have been in the game 30 years or more.  Being a part of the local REIA is a great way to meet other real estate investors.  In some cases, they may even hold special “deal making” sessions, which is basically a roundtable of investors pitching the deals they have available.  It’s definitely possible to snag an off-market deal or two this way.

Directly with owners

Another method to find a property off-market that is commonly overlooked is contacting the owner directly.  Wholesalers do this already, so in a way it’d be cutting out the middleman entirely (and thus potentially saving even more).  Personally, I’ve found that if you present yourself to be a willing, ready, and able buyer, many homeowners will consider an offer even if they didn’t have any intention of putting their property on the market.   

 

 

 

 

 

Posted by FIbyREI