Just because you don't see real estate investment deals right away doesn't mean there aren't deals there.
My partner Dave and I have had points in time in the last 18 months where we've looked at dozens of houses and made at least six offers before we get a deal that meets our criteria. And we're intensely focused, full-time real estate investors with a lot of time and resources dedicated to uncovering deals.
Most of the time we find a deal or two each month that works for us, but sometimes you have to be patient. Nevertheless, there are six key things you can do, besides waiting for an MLS® listing that fits your criteria, to find deals faster.
#1. Call FSBO (For Sale By Owner) Listings
Generally we find FSBO homes are overpriced and the owners not that motivated to sell, but every once in awhile you can find a great deal. In the last few years, many of the FSBO deals that we have looked at have been overpriced because the owner owed more than the house was worth or they were just feeling out the market before they listed it and weren't that motivated. One of the deals we did in 2012 was first an FSBO that we tried to buy. The seller didn't agree to our price and then listed it shortly after we'd made our offer. We waited a month and then bought it for the same price we'd offered him privately. Once he'd consulted with a Real Estate Agent and put it on the market, he was willing to accept that our price was a decent offer, but before that he thought he could do better. We still try with FSBO's but they aren't our best source of deals.
#2. Call For-Rent Advertisements
You should also call for-rent advertisements not posted by a professional property management company. You may find tired landlords who would love to partner with you, or else sell you their property that they can't seem to find tenants for because they aren't targeting the right tenants (and you know who to target because you're a sub-market expert now!). One of the deals we did in 2010 was with a couple that wanted to spend six months a year travelling so they didn't want to manage their rental, nor could they sell their property for a price they were happy with, and nor were they happy with local property management options. So we partnered with them on their property based on its appraised value that day. We became 50-50 partners. We made them money on their property and took care of it so they didn't have to worry; and we got into the deal with nothing more than the cost of an appraisal and a joint venture agreement.
#3. Go To Local Real Estate Club Meetings
Real estate club meetings in our area have been a tremendous source of deals, joint venture money and private lenders for us. The first RRSP mortgage we did was with folks who approached us at a Nanaimo Real Estate Club meeting. One of our coaching clients found a property in Victoria to flip through someone she met at a club meeting in her city. Another one of our coaching clients found his first JV partner and a great deal at a club meeting in Surrey.
#4. Show Your Interest
When you are meeting people in the area, mention that you're interested in buying. Jot your number on a piece of paper so they can get in touch with you if they know someone. If you have a dog or a child to walk around with you, you'll typically get into more conversations with people. We've had so many leads come to us just because people know we buy houses on that street.
#5. Talk to People
Let other people know you're shopping in that area: real estate agents, property managers, tradespeople you know. Even our junk removal company brings us leads.
#6. Target Sellers in Your Area
You can do very low cost online marketing to target sellers in your area. You'll find that you'll get a wide variety of responses, so keep your focus on your target property type and your target area and don't get distracted. You can try Yellow Letter Marketing to specific houses, flyers, business cards in mailboxes, and more, depending on your budget. Our coaching client Michelle Pink of Think Pink Real Estate put an ad in her neighbourhood paper in Calgary. It had a picture of her with her family. When she took her son to his playgroup, people started asking her about what she did and what kinds of houses she bought. It hasn't resulted in a deal at this point, but it's building awareness of what she does in her target area and will likely pay dividends in the near future.
The main thing is to consistently do a few things each week. Over time, the deals will become so obvious it will be like there is a neon sign saying "GREAT DEAL HERE." And, even better, because you're a sub-market expert, you'll know exactly what to say in your ad when you go to put tenants in your suite, and you'll rarely find yourself dealing with a vacancy.
It sounds straightforward because it is.
This is an edited excerpt from the Amazon #1 bestselling book More than Cashflowby Julie Broad. You can get your copy and get more valuable investing advice from Julie at revnyou.com.
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