If you’ve decided that the real estate investment business is right for you, then you might be wondering where the best places are to look for the properties that will give you the best return on investment (ROI).
If you work a 9-5 job or have children, chances are that you are short on personal time to look for properties. But that doesn’t mean you can’t still have an edge on the competition and find good investment property.
Here are some of the methods I’ve used in the past, even though I didn’t have a lot of spare time.
Newspaper For Sale ads: Usually for sale ads ran by a realtor company are not the place to find the best deals, but it doesn’t hurt to scan them looking for the words “desperate to sell” or “willing to go the extra mile”. It’s not the norm but you will run across them and it doesn’t hurt to look because a lot of the pros don’t want to “waste their time” scanning newspaper ads.
Newspaper For Rent ads: You will more than likely run across a lot of frustrated landlords out there trying to rent their property, when they would much rather not be a landlord at all. It doesn’t hurt to ask every landlord if they want to sell. If the answer is yes, then you can begin to negotiate with them to get a good deal. Remind them that they will be free of the house, the payments, the upkeep, chasing tenants to pay rent, etc. If you’re pitch is good enough, and they want out badly enough, you can even talk them into owner-financing the property to you at a reduced rate.
Newspaper Real Estate Wanted section: Even if you have nothing to sell, chances are that by calling one of the “real estate wanted” phone numbers, you will be talking to a wholesale investor. These folks tend to buy properties in large quantities and end up with more than they want. So by calling them and developing a rapport, they may hook you up with a very good deal.
Newspaper Obituaries: This might sound a bit morbid, but sometimes you can track down homes that are about to go into foreclosure if there are no living relatives to take over the property.
Realtors: If possible, find a realtor who is just starting out and is hungry to make a name for themselves. They are more willing to submit lowball offers just to get the deal. You can also offer them a finder’s fee to give them incentive to locate properties meeting your criteria.
For Sale By Owner ads: It’s in your own best interest to call or stop by every For Sale By Owner (FSBO) property. Just knock on the door, or call them, and ask questions to see what their situation is. Be upfront and honest with them and tell them you are a real estate investor. Let them know you are interested in buying their house (at a much lower price of course) but also give them a few useful tips to try and help them sell on their own. Leave your name, business card, phone number etc. with them and tell them to call you if they aren’t able to sell on their own. If they don’t sell in a few months they will probably be frustrated or desperate and need to sell …and you will probably be the one they will call. By being credible, friendly and professional in your initials dealings with them, you will be in a position to give them a “low-ball” offer on their home without offending them.
Investor clubs: Real estate investor clubs are a good source for quite a few reasons. The best leads can come from someone else who has found a great deal but doesn’t have the money or time to snatch it up. The investor clubs are full of networking opportunities to meet local people in the same business you’re in. It never hurts to sit around and swap stories with people in the business. You’ll be surprised at the things you learn or ideas that are generated that you might not have otherwise thought of.
Relocation companies: Relocation companies always know about people who have properties they need to sell. If you pitch yourself to them in a positive way, they might be willing to call you about properties their clients are having trouble selling.
Your local Court House: At the courthouse you’ll find all the records for divorces and home foreclosures. It’s a great idea to make friends with the folks who work in these offices at the court house. They can give you a very substantial edge over the competition by helping you find information on the newest properties before everyone else finds out about them. Pretty much all investors think about looking for properties that are in foreclosure, but not all investors think to look at the divorce records. People going through a divorce are typically trying to sell their house quickly so they can move on with their lives. So finding these properties quickly can be a great way to make a good profit.
So there you have it, some pointers that are tried and true. Now you can put a plan in place that suits your style and start looking for those deals. Don’t get discouraged if you look at 10 properties and only 2 or 3 of them are even remotely interesting. It takes time to find the goodies, but you will be rewarded for your persistence in due time.