Ever become frustrated from your latest search to find your next deal and concluded that there are no good real estate deals out there? Many real estate entrepreneurs have shared this opinion from time to time. In reality, this thought is couldn’t be further from the truth. You can be assured that no matter what, no matter when, there are ALWAYS deals out there. If you are not finding any deals, perhaps your tactics may need some sharpening or your sights may need widening.
Searching for properties can be a time consuming process and as a result, many investors can lean too heavily on their realtors to locate their properties. Although many realtors do a great job finding good investment property, they are often limited to properties available on the MLS.
There are a number of methods to source deals which allow you to bypass the realtor and deal directly with the seller/owner, where many of the best deals can be found.
The process in dealing directly with an owner can be much more fruitful because you have the opportunity in making the sales process more relationship based than when represented by, or operating through a realtor. Remember, in sales, people do business with people they like. Finding and negotiating a great real estate deal is no different… it comes down to sales and it’s all about your sales process.
The ability to ask your own probing questions to discover the underlying motivation behind the sale enables you to become empathetic to their situation which can create the best platform for a win/win deal. The quote; “people don’t care how much you know until they know how much you care “is very prevalent in this type of situation.
There are many ways to find good deals; the challenge for many investors who rely exclusively on their realtors is getting out and pounding the pavement themselves. So what does pavement pounding look like?
Here’s 10 ways to shake the bushes for deals. These are in no order of preference or effectiveness.
1. Call FSBOs.
You can locate owners by checking out “For Sale by Owner” ads from a local major paper, a small neighborhood publication or from online ads. They will normally be found under the “Houses for Sale” category. There are key words to look for which may be clues as to the degree of seller motivation. Ads which contain “Just reduced; Handyman Special; TLC needed; For Sale or Lease; Must Sell” are suggestive words which allude to the fact there may be some issues with the property or the seller’s “life “situation.
Secondly, there are many “For Sale by Owner” companies which provide discount flat rates to their customers who are selling their homes. These companies provide a website with pictures and property details as well as contact information of the owners. This enables you to contact the owners directly and begin your own sales process.
2. Call rental ads.
There are many landlords out there who do not want to be landlords anymore. Many don’t have the time, money or the patience to deal with tenants, property management or maintenance. By calling rental ads, you may get a willing owner on the phone that may be more than ready to negotiate. Some people may really need to sell but have not had the time or motivation to put the property up for sale until you call them. Timing can be everything in finding a great deal.
3. Drive neighborhoods.
There could be potential deals within walking distance of you. Choose an area of approximately 300 houses. Become an expert in that area. Drive the area regularly and check for signs of distress. These signs can be something like:
· Mail gathering at the front door for weeks or months
· Excessive deterioration of the house
· Overgrown grass, hedges, and landscaping
· Lockboxes on doors, railing, or poles
· Boarded up basement windows
· Zoning/municipal notices posted on windows or doors
4. Knocking on doors.
When you see property in the condition described above, go up to the door and knock on the door. What do you say? Something like; “Hello, my name is [your name], I am a real estate investor and I am interested in potentially buying a house in the neighborhood and I’m just knocking on doors to see if anyone is interested in selling.” Once you have finished your conversation, go to other neighbors and do the same thing. I suggest using the 10 – 10 -20 principal. That’s 10 houses to the left of the subject property, 10 to the right and the 20 on the other side of the street.
By doing this you establish your presence with other neighbors and you may find a sale where you least expect.
5. Put notices or letters on doors.
In a similar fashion to the above suggestion (or if there is no one home), you can attach notices or letters to the door of a property which looks to be in a distressed situation There are many ways to word such a notice or letter, but it can be as simple as “Hello homeowner. My name is [your name] and I would like to buy your house. Please call me if you are interested. “
6. Go to your local Landlord/Tenant board.
There are cases which are held on a regular basis at landlord/tenant boards across the country. These happen both in the courtroom and outside of the courtroom by a mediator. Attending these hearings from time to time gives you the opportunity to meet landlords or property managers who have just come from an experience they probably wish they had not had to go through. They may be very willing to talk to you about selling their property.
7. Go to Foreclosure court.
Going to foreclosure court can be a very interesting experience. You can witness foreclosure hearings which will be at various stages in their processes. Sometimes the owners are in attendance and sometimes not. The reason for attending, other than for your edification, is to potentially meet owners and be able to provide them some help. This maybe financial help, advice to save their property or a deal to buy the property. Sincerely providing options to owners who are unfamiliar with the process can be invaluable to them. I encourage you to understand the foreclosure process in your province.
8. Placing ads.
Utilize local papers and online ads like Kijiji and Craigslist to get your message out. Simple messages like; “I can buy your house fast!” “Need to sell your house today?” It can be as simple as “I Buy Houses.” These ads work well under the “Money to Lend” sections and attract people who are looking for cash to keep their houses. They may read your ad and realize if they just sold their house, it may relieve their financial pressures.
9. Contact realtors.
Create a simple message. “I am looking for distressed houses in [your area of choice] that I can get for a minimum of 10% (or whatever your number is) under market value. I can buy cash and close quickly.” When you fax this to all the local real estate brokerages, you should get calls. This can be the initiation to creating some great relationships with realtors who may be able to find you some great deals.
10. Word of mouth.
There is no better advertising for you than word of mouth. Just like in any type of sales, when a trusted friend, neighbor or business associate passes along your name to someone they feel can benefit from what you do, it comes as a great recommendation to the person receiving it. This can dramatically help in your sales process as your service and credibility have perhaps already been addressed. All you have to do now is fill the need and make the sale.
When it comes to finding more deals, it is not the lack of resources, but rather the lack of resourcefulness that truly prevents real estate investors from reaching their investment goals.