Learning how to find real estate deals is the first key to unlocking unlimited success as a real estate investor.
Learning how to find the juicy, big profit deals accelerates your wealth creation considerably.
When you’re first getting started in real estate investing many beginners scratch their head wondering what to do first and how to find their first great deal.
This article shares a list of great ways to find big-profit real estate deals whether you’re a beginner on a shoe-string budget, or trying to scale up your operation.
Develop your criteria of a big profit deal – In order to start your search for a great deal you first need to understand what makes a great deal.
High ARV – after repair value – One the best ways to create big profits in real estate is to rehab properties, also called ‘fix and flips.’ As a rehabber, your job is to shop for deals in nice neighborhoods, specifically looking for the duckling on the block.
If you find that you can purchase the property for 40 to 70% of what the other homes are selling for in the neighborhood, you may have a winner.
Then you just need to calculate the estimated cost of repairs to the purchase price – which gives you the total amount you have invested into the property.
Finally, analyze your after repair value, or ARV, and this will help you determine whether you looking at a cash cow or money pit.
Distressed properties and distressed people – The ugly duckling properties, more generally called distressed properties, are usually controlled or occupied by people in distressed situations.
This is where the biggest profits are made. Searching for distressed properties owned my motivated sellers, as they are generally called.
Real estate investors do a great service to people in distressed situations because by the mere appearance of these homes, in many cases, these properties have become unmanageable and the owners want OUT.
Divorce, job loss, negligible repair costs and other stressful circumstances are all reasons owners want to get out from under the burden of these homes.
However, searching for distressed properties is only one way of finding real estate deals. This strategy is used mostly by fix and flip investors, who buy, rehab, and sell properties within a short time – usually within a year.
Benefits of learning how to find great deals – if you start using the various methods listed below and get good at it, you’re well on your way to becoming a successful real estate investor.
This is because finding great deals can be profitable as a wholesaler, fix-and-flip investor, or buy-and-hold investor.
CHECKLIST of Ways to Find Big Profit Real Estate Deals
Real Estate Agent – Right off the bat, you should employ real estate agent who specializes in real estate investment properties in your area.
The right real estate agent will be a valuable member of your team of investment advisors/providers as they may have access to great deals, other investors who are trying to sell profitable properties and may be able to help you sell your properties when you find great deals.
Network with Investors – In one sense you may say, “Why would I want to network with my competitors?” Well, other investors are always buying and selling properties.
There may be properties that they want to unload for a bargain for many reasons. This is where your opportunity is.
Also, when it’s time to sell, your growing network of fellow investors may make buyers.
CraigsList – This is a great free resource for finding and selling great deals. People used to find great deals in the classified section of newspapers.
And while there are still some areas across the country where this is a great place to find deals, today craigslist has taken the place of the newspaper classifieds.
It’s free to post and free to browse Craigslist, which makes it a great tool for hunting big profit deals.
You can post an ad announcing to people that you are searching for a property to buy.
You can also connect with landlords who regularly post on Craigslist.
The truth of the matter is that many landlords fall on hard times with certain properties or neglect them for some reason or another.
So there is always a good reason why landlords are willing to sell a property with potential to another investor.
You want to look for the small time investors on Craigslist, not the bigger investment firms and property management companies.
Calling Bandit Signs – You see them all the time when driving around town, so why not pick up the phone and call the number of the real estate investors who place bandit signs on street corners.
Again, this is just another good way to connect with real estate investors.
Wholesalers – The job of a wholesaler is to find great deals for real estate investors who want to buy the properties they find.
You can easily build a network of wholesalers who bring deals across your table nonstop.
Cruise Neighborhoods – Have you ever been driving down the street and run across a property that looks like the eyesore of the neighborhood?
Had you been in the right frame of mind you may have inquired more about this property. As a real estate investor, your job is to find diamonds in the rough.
Driving neighborhood’s is one of the best ways to get started in real estate investing because it…
- Familiarizes you with neighborhoods where your deals will come from
- Helps you develop an eye for a good deal
- Doesn’t cost you anything but gas money
- Teaches you where the deals are in your city
As you develop your eye for good investment opportunities you may look for telltale signs such as:
- An overgrown lawn with grass up to your knees
- A tarp on the rooftop which may mean that there was roofing damage they could not get fixed
- A depressed look with the exterior of the house
- And similar signs
Be sure to bring a pen and notepad or make voice memos on your smart phone. You’ll want to write down the address, condition of the home, and take a couple of quick pictures of the home.
With this information you can research public records to find out who owns the home and, perhaps, dig up a little more information about the property.
Eviction Records – Many landlords experience the nightmare of evicting a tenant. This is usually a very unpleasant experience for landlords. Which means that they are likely to be motivated sellers.
As the saying goes, “One man’s trash is another man’s treasure.”
You can be a breath of fresh air to a landlord who’s looking for a way out of an eviction situation.
As you begin to gain some traction in your real estate investment operation you may wish to scale up. In this case there are some more advanced level deal finding strategies you can employ.
Next Level Strategy to Finding Real Estate Deals:
Facebook Ads – Everybody is on Facebook and the platform collects all sorts of information about its users that is sold to advertisers. If you become an advertiser you could target people based on income level, zip code, marital status, and other highly customizable demographics and interests.
This means that just like with the old-school bandit signs, you can now offer to buy peoples’ distressed and ugly homes. With this strategy, instead of chasing deals, deals will start flooding your inbox!
Google Adwords – Some homeowners in difficult situations search Google for solutions to sell off their property. So you can also build a small website and place Google ads offering to buy distressed and ugly homes.
Direct Mail Letters/Postcards – This is an age-old strategy of generating inbound deal flow to find real estate deals. You do this by targeting zip codes that fit your criteria of good neighborhoods to invest in and send mass mailings with that same message, “We buy distressed properties/ugly homes.”
If you send 10,000 postcards and only close one deal that nets you $5,000 – $10,000 per mailing, then this investment is well worth the effort.
Placing Bandit Signs – Earlier we talked about responding to the bandit signs that others have placed strategically around town. Now the tables are turned, because you ca now create bandit signs and place them around town.
Again, this is another inbound deal flow strategy is been used for decades to find big profit investments.
Conclusion
This is a solid list of options that you can mix and match to create your perfect level of deal flow. As you have read this includes no cost, low cost, and higher cost strategies based on your experience level, open capital and time.
The most important thing to remember is that real estate investing, as it is with anything, requires commitment, time, and persistence.
You just have to start where you are, stick with it, give it time and keep growing.
Can you share your favorite strategy for finding real estate deals?
