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Real estate is bought and sold year-round, but finding great deals can take time and patience. Knowing who to connect with and where to look is half the battle. Leverage the internet, social media, and connect with locals from wholesalers to Uber drivers who can lead you to great deals.
Whether you’re a retail home buyer or an active real estate investor, there are various ways to make money or earn equity in real estate. To maximize your success, we’ve compiled 11 tips for finding great real estate deals.
1. Subscribe to Investor Buyers Lists
Join real estate investors’ buyers lists in your local area. You can find the major investors in your region through a Google search. Fill out their “Contact us” form requesting to be added to their buyer’s list, or see if they have a “For Investors” page with a form to join their list.
Subscribing to buyers lists will allow you to be notified when an investor has a new deal under contract. These deals are not listed on the MLS and come at a discounted price (often they are cash only). The great deals are highly sought after, so be ready to act quickly as there are many other buyers looking for these deals, as well.
Related reading: 11 Ways to Invest in Real Estate
2. Check Public Records
Every local government has public records for houses with code violations, water shutoff, etc. These are signs that the household may be struggling to maintain the property or make ends meet financially.
The harder it is to obtain the records, the better the deals could be as more work means fewer people are going after them. The easiest records to obtain are free with public, online access, whereas the difficult records come at a monetary cost and require going through records manually at a local courthouse.
Once you have the information, you can cold call the homeowners to see if there’s any value you can provide in buying the property. If you prefer an in-person conversation, door knocking is another option to get in contact with these homeowners– meeting face-to-face can provide a unique advantage as many people looking for real estate deals just send a letter, which can be easily forgotten or thrown away. Other situations worth checking public records for are couples who recently filed for divorce or houses going through probate.
3. Place Bandit Signs
Placing bandit signs to attract homeowners willing to sell at a discount can lead you to great real estate deals. You’ve probably seen the yellow signs on the side of the road or on a post at an intersection. Most say “We Buy Houses Fast, For Cash XXX-XXX-XXXX.” In many places, bandit signs are against the county ordinance. However, due to their effectiveness, this strategy to find real estate deals is still used.
Signs range from $1-$2 each depending on if it’s single-sided or double-sided, and another $1 in labor (unless you plan to put them up yourself). Bandit signs are a numbers game, meaning the more signs you place, the more likely you are to be contacted.
Start by placing 100 signs in busy, easy-to-view locations to increase the probability of being contacted. When contacted, try to answer the phone rather than letting it go to voicemail as most people will not leave voicemails and can be difficult to get in touch with later.
4. Reply To Wholesaler Ads
Connect with local wholesalers or “we buy houses” companies who buy properties at deep discounts in your area. Wholesalers will advertise online via Craigslist and even the Facebook Marketplace as well as offline using bandit signs. Message the wholesalers on Craigslist and Facebook Marketplace to see if they have any active deals available. The bandit signs should have a phone number you can call to check for available properties.
Local wholesalers and companies who buy houses in your area will have properties under contract at much lower prices than what you see listed on the MLS. Andy Kolodige, a Virginia home buyer, adds, “There will also be less people checking these deals as they require more work than signing up for an investor list.” Further, you are building relationships with local wholesalers in your area that could be advantageous the next time you are looking for a great real estate deal.
5. Talk to Home Inspectors
Great real estate deals typically require some rehab, and who better to talk to than home inspectors who are in these houses daily? Grow your network by calling local home inspectors you find on Google. Discuss how many homes they are inspecting per week and the typical quality of the homes. An inspector may be able to refer you to a home or neighborhood of houses to contact where a great real estate deal can be found for a small referral fee.
6. Identify Distressed Homes
Driving for dollars is an effective strategy for finding great real estate deals– you just have to know where to go and what to look for. Start by driving around your local area in search of homes with obvious signs of abandonment or disrepair. This can come in the form of overgrown grass/weeds and shrubbery to the point of covering the house or making it difficult to walk through the yard. Also, look for paperwork on the front door (typically colorful letters from the county) or broken windows.
To get in contact, you could either approach the home or write down the address for later to send a postcard. The advantage of driving for dollars is that not every house in distress has a “typical” pain point, meaning the property might not show up in the public records for anything.
7. Explore Real Estate Auctions
There are two types of auctions to find great real estate deals:
- Tax auctions
- Sheriff’s auctions.
Tax auctions (not to be confused with a tax lien auction) are where properties that are behind on taxes get auctioned off by the state/county/city to pay the outstanding taxes. Purchases must be done in cash, deposits are required day-of, and payment is typically due within 1-2 days. Tax auctions can be risky because the sale is “as-is, where-is,” and there could be unforeseen title complications when reselling the house.
A sheriff’s auction includes houses in foreclosure that the sheriff will auction to the highest bidder. The rules for purchasing are the same as a tax auction and carry the same risks. Investors who understand the intricacies of either auction type can make big bucks due to the barrier of entry for new investors and the risk involved (i.e. high risk, high reward).
8. Connect with Realtors
Talk to real estate agents and see if they’re visiting houses that are “too ugly to sell” or won’t sell well. Many agents don’t want to deal with these properties (especially during Covid-19) when they could be focused on higher-priced properties.
Typically, these properties will be purchased by well-connected investors, but agents get a larger commission if they sell directly to the end-buyer. This is because if there is no agent on the buying side, the selling agent keeps the entire realtor commission from the home sale.
The best way to show agents you’re serious is to be active in the local community. This can be done through networking and also by being active on social media (e.g. connect with local real estate agents via LinkedIn and Facebook).
As a retail buyer, you can post what you’re looking for in a house. As an investor, show the houses you’ve flipped or discuss your skillset and how you can provide value– this will allow realtors to take you seriously.
9. Spread the Word
Word of mouth is an effective way to communicate what you are looking for in terms of real estate. Talk about what you want in a deal with your co-workers, friends, and family. You won’t know what connections other people have until you talk to them. They could lead you straight to the elusive bargain you’ve been searching for.
Don’t just stop at your inner social circle. Tell your Uber driver that you’re looking for discounted real estate. These drivers drive by homes all day and are in contact with so many people daily who talk about their occupation, home, and situation. They may know of someone looking for a buyer, or you can offer an incentive for your driver to call you the next time they drive by a distressed home.
10. Join Local REIAs
What better way to get access to deals than being surrounded by those invested in them? REIAs are Real Estate Investor Associations created for networking with investors in your area and typically come at a yearly cost to join.
Becoming an active member of a local REIA will expand your network to include investors who have access to the great deals you’re looking for. Focus on making meaningful connections with them, and you could gain VIP access to their property deals.
11. Search the MLS
The MLS is a classic place to look for real estate. However, if you’re looking for deeply discounted deals in a metropolitan area or anywhere that is competitive, it may be hard to find great deals on the MLS. This is because the good deals get picked up by investors and “we buy houses” companies before even making it to the MLS. Although the MLS has become more difficult to find great real estate deals, it’s still possible and worth searching through from time to time.
There is no one-size-fits all strategy to find the best properties at the lowest prices. Your success will depend on how well you tailor these tips to suit your needs, budget, and time as each buyer’s goals are different. Investors may pursue different strategies than retail buyers, but the tips we’ve shared will get you started in finding a great real estate deal for your next investment property or home purchase.