Author Topic: How do you find properties to invest in?  (Read 2216 times)

Neo

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How do you find properties to invest in?
« on: September 27, 2017, 12:55:17 PM »
So I've got 4 properties at this point and have bought them all via the regular public listings on realtors' websites. I'm looking to break into the next level and find properties before the regular buyer off the street. I've been banging my head against the wall lately. Either they sell before they hit the market or are too expensive to invest in by the time they get listed. I need to become more of an insider and start buying like an investor instead of a member of the public, if that makes sense. I need to get the first shot at REOs, foreclosures, sellers in distress looking to unload properties at a discount, etc. My usual agent is a nice enough guy but he just isn't bringing me anything I can't find for myself on the listings page.

Anyone have any tips for upping my property-finding game and breaking into that next level of RE investing?

jinga nation

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Re: How do you find properties to invest in?
« Reply #1 on: September 27, 2017, 01:10:33 PM »
I'm in a similar situation. Someone recommended Bigger Pockets local meetups. The RE brokers who attend had stuff for me, it was the dumpy shitty stuff. A friend had a realtytrac account and we tried to get some pre-foreclosures, but the banks and the brokers seem to be in cahoots.
I'm stuck too, but then the market here is low on good inventory. Plenty of RE in low-income areas but I don't want to deal with the hassles that come with it, even if it Section 8.

YoungGranny

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Re: How do you find properties to invest in?
« Reply #2 on: September 27, 2017, 01:56:48 PM »
Posting to follow. I'm in the same boat where I have to sit and wait for the right thing to hit the market and if it's a good price it's not un-common to see multiple offers in my area. Would love to figure out how the next level investor is shaping deals.

Cwadda

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Re: How do you find properties to invest in?
« Reply #3 on: September 27, 2017, 02:32:17 PM »
I've had success with emailing other landlords and asking them flat-out if they wanted to sell their property.  I got positive responses from people who were moving far away.  It's a win-win because they don't have to pay a realtor commission fee, and you get a property while minimizing closing costs.  I'm probably going to do this again.  I've had my fair share of shady/PIA RE agent dealings, and I prefer to talk to the seller directly.

I'm making RE agents out to be the bad guys, which certainly isn't the case.  For every bad realtor, there's always a fantastic one.

Quote
My usual agent is a nice enough guy but he just isn't bringing me anything I can't find for myself on the listings page.
Is your agent investor-friendly?  I.e. does he know what separates a good investment property from a bad one?  A surprising number of real estate agents aren't RE investing-savvy at all.  When you sign up with an agent, you're paying them to find and transact properties for you.  If they aren't doing that job to your satisfaction, you need another agent.

You could look into working a more investor-friendly agent?  One that will find off-market deals for you. 

Have you tried direct mail campaigns?

tralfamadorian

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Re: How do you find properties to invest in?
« Reply #4 on: September 27, 2017, 06:41:03 PM »
I've had success with emailing other landlords and asking them flat-out if they wanted to sell their property.  I got positive responses from people who were moving far away.  It's a win-win because they don't have to pay a realtor commission fee, and you get a property while minimizing closing costs.  I'm probably going to do this again.  I've had my fair share of shady/PIA RE agent dealings, and I prefer to talk to the seller directly.

+1

SwordGuy

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Re: How do you find properties to invest in?
« Reply #5 on: September 27, 2017, 07:58:14 PM »
Gobs of books out there (probably free at the library) that teach how to do this.

Neo

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Re: How do you find properties to invest in?
« Reply #6 on: September 27, 2017, 08:11:54 PM »
I've had success with emailing other landlords and asking them flat-out if they wanted to sell their property.  I got positive responses from people who were moving far away.  It's a win-win because they don't have to pay a realtor commission fee, and you get a property while minimizing closing costs.  I'm probably going to do this again.  I've had my fair share of shady/PIA RE agent dealings, and I prefer to talk to the seller directly.

I'm making RE agents out to be the bad guys, which certainly isn't the case.  For every bad realtor, there's always a fantastic one.

Quote
My usual agent is a nice enough guy but he just isn't bringing me anything I can't find for myself on the listings page.
Is your agent investor-friendly?  I.e. does he know what separates a good investment property from a bad one?  A surprising number of real estate agents aren't RE investing-savvy at all.  When you sign up with an agent, you're paying them to find and transact properties for you.  If they aren't doing that job to your satisfaction, you need another agent.

You could look into working a more investor-friendly agent?  One that will find off-market deals for you. 

Have you tried direct mail campaigns?

My agent is definitely not investor friendly. He is honestly just a guy to set up showings of the listings i send him and then help execute the deal. I need to find someone more in tune with my goals.

How do you find owners email addresses? And to the other poster who mentioned books, do you have any to recommend?

Another Reader

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Re: How do you find properties to invest in?
« Reply #7 on: September 27, 2017, 08:38:43 PM »
As an out of state owner of multiple investment properties, I suggest you avoid using the lists of non resident owners.  In my opinion, direct mail is a waste of money because every owner is getting multiple mailings.  I get from one to 10 solicitations to buy my properties a day.  Straight to the recycle bin.  The most successful off-market buyers walk their neighborhoods of interest.  They chat with people and note the addresses of houses that are run down or appear to be unoccupied.  They get information from people in the neighborhood about these properties and research contact information, particularly phone numbers.  They call these owners and inquire politely if they are thinking about selling.  No pitch of I'm prepared to make you a FAIR CASH OFFER, which doesn't work.  If there is interest, they try to get in to see the property and have a low key conversation.  If it works out, great, if not, on to the next one and maybe the motivation of this owner will change.

I had one of those people hit me up for one of my properties.  The house was vacant and we were getting ready to put a new roof on and paint the exterior.  I'm sure he saw it was vacant and noted the old roof and paint before he decided to call.  I cut him off, telling him I was also an investor and the house was going to be renovated.  We chatted and hung up. Several months later I saw the house around the corner being trashed out.  I looked it up in the tax records and he had bought it at a very good price, given how fast prices were rising.

A good investor agent also owns rental properties.  That's good and bad.  If they spot a really good deal. they might buy it themselves.  Success for the best investor agents means they make good money on their properties and on feeding you deals.  You make them happy by buying consistently and by giving them both the buy and the sell transactions if it's a flip.

I don't frequent Bigger Pockets these days.  Too many sharks and charlatans.

waltworks

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Re: How do you find properties to invest in?
« Reply #8 on: September 27, 2017, 08:41:39 PM »
The pickings are really freaking thin right now. And the demand is crazy. My last remaining rental won't be mine anymore in about 2 weeks.

Seriously, when I'm getting tons of solicitations to buy houses (that I haven't owned in years) in the mail every day, that's my personal sign that the market is at the top and it's time to get out.

So I guess to answer the question, I wouldn't put much effort in right now. Work a side gig, or invest elsewhere, or enjoy your free time. The RE market will turn eventually and there will be deals again.

-W

srad

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Re: How do you find properties to invest in?
« Reply #9 on: September 27, 2017, 09:11:50 PM »
I purchased my first 2 properties off of the MLS, after that, all have been either from Craigslist or word of mouth.  You let people know you are looking to buy and eventually someone will say hey i know so and so who's thinking of selling...  Now if you are looking to build quick this probably wont work well for you.  I average a purchase every two to three years.  I'm also in a higher cost of living area and the competition for homes is nutz.  So i'm ok passing on marginal deals and waiting for the right deal for me. 

Another Reader

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Re: How do you find properties to invest in?
« Reply #10 on: September 27, 2017, 09:15:25 PM »
The pickings are really freaking thin right now. And the demand is crazy. My last remaining rental won't be mine anymore in about 2 weeks.

Seriously, when I'm getting tons of solicitations to buy houses (that I haven't owned in years) in the mail every day, that's my personal sign that the market is at the top and it's time to get out.

So I guess to answer the question, I wouldn't put much effort in right now. Work a side gig, or invest elsewhere, or enjoy your free time. The RE market will turn eventually and there will be deals again.

-W

Where are you putting the proceeds?

How are you stomaching those taxes on capital gains and depreciation recapture?  I sold several of the less productive properties to use up some stored depreciation and pay off mortgages in the high five percent range on better properties.  I'm in the remaining properties for the long haul.  Occupancy is high and rents are rising, although that will also turn.

waltworks

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Re: How do you find properties to invest in?
« Reply #11 on: September 27, 2017, 10:20:34 PM »
I'm sticking the proceeds in index funds, mostly. They'll work harder there than in a property (just as an example, my final one closing soon) that is selling for $365k (net of selling costs) and was renting for $1800/mo. And I don't have to manage anything anymore.

Property prices just went nuts in the last 5 years, I'm glad I was in the right place at the right time. I'll pay the piper on capital gains and depreciation and put that money elsewhere. If/when RE goes on sale again I'll get back in. Maybe. We have hit kinda-sorta FIRE status and I am not sure I care about investments that require much effort anymore, even if they're really lucrative.

-W

rab-bit

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Re: How do you find properties to invest in?
« Reply #12 on: September 28, 2017, 03:29:00 AM »
Posting to follow.

tralfamadorian

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Re: How do you find properties to invest in?
« Reply #13 on: September 28, 2017, 07:09:30 AM »
All real estate is local. I haven't received a yellow letter in over a year for one market I own in. In another, I was doing a 1031 when the whole thing fell through; we decided to keep the property and continue to rent it. Nine months later and I'm still getting phone calls on my "expired" listing.

Direct mail is touted by gurus and I'm sure it works in some markets at particular points in the cycle but it has never interested me. 

I seconded the post above re calling landlords. That's a good one to start but for me the best way to purchase properties is networking. When I buy a property, everyone gets a thank you note that I had contact with- my agent, seller's agent, sellers, local lender, real estate attorney, etc. All of them have a similar end appropriate for the audience letting them know that I'm still buying.  All the professionals in the transactions get periodic follow ups via phone or email.  It's a long game.

Pennycounter

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Re: How do you find properties to invest in?
« Reply #14 on: September 28, 2017, 07:48:38 AM »
Posting to follow

leighb

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Re: How do you find properties to invest in?
« Reply #15 on: September 28, 2017, 10:23:13 AM »
Know your markets.

I live in a HCOL area where my house has doubled in value in the past 10 years. I invest in a LCOL area where I can't sell a duplex that I have listed on the MLS for $25,000. It's all about location. And really down to the block level.



Cwadda

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Re: How do you find properties to invest in?
« Reply #16 on: September 28, 2017, 02:11:08 PM »
I've had success with emailing other landlords and asking them flat-out if they wanted to sell their property.  I got positive responses from people who were moving far away.  It's a win-win because they don't have to pay a realtor commission fee, and you get a property while minimizing closing costs.  I'm probably going to do this again.  I've had my fair share of shady/PIA RE agent dealings, and I prefer to talk to the seller directly.

I'm making RE agents out to be the bad guys, which certainly isn't the case.  For every bad realtor, there's always a fantastic one.

Quote
My usual agent is a nice enough guy but he just isn't bringing me anything I can't find for myself on the listings page.
Is your agent investor-friendly?  I.e. does he know what separates a good investment property from a bad one?  A surprising number of real estate agents aren't RE investing-savvy at all.  When you sign up with an agent, you're paying them to find and transact properties for you.  If they aren't doing that job to your satisfaction, you need another agent.

You could look into working a more investor-friendly agent?  One that will find off-market deals for you. 

Have you tried direct mail campaigns?

My agent is definitely not investor friendly. He is honestly just a guy to set up showings of the listings i send him and then help execute the deal. I need to find someone more in tune with my goals.

How do you find owners email addresses? And to the other poster who mentioned books, do you have any to recommend?
Then politely tell him that you're seeking an agent who can do more legwork with finding investment properties. Say you will refer him to people you know that will be compatible. No harm, no foul.

For Craigslist you don't get their direct email address, just use the CL email relay system they have in place. I can dig up the sample message I used that got responses. It was short, about 3 sentences long.

Cwadda

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Re: How do you find properties to invest in?
« Reply #17 on: September 28, 2017, 02:14:31 PM »
As an out of state owner of multiple investment properties, I suggest you avoid using the lists of non resident owners.  In my opinion, direct mail is a waste of money because every owner is getting multiple mailings.  I get from one to 10 solicitations to buy my properties a day.  Straight to the recycle bin.  The most successful off-market buyers walk their neighborhoods of interest.  They chat with people and note the addresses of houses that are run down or appear to be unoccupied.  They get information from people in the neighborhood about these properties and research contact information, particularly phone numbers.  They call these owners and inquire politely if they are thinking about selling.  No pitch of I'm prepared to make you a FAIR CASH OFFER, which doesn't work.  If there is interest, they try to get in to see the property and have a low key conversation.  If it works out, great, if not, on to the next one and maybe the motivation of this owner will change.

I had one of those people hit me up for one of my properties.  The house was vacant and we were getting ready to put a new roof on and paint the exterior.  I'm sure he saw it was vacant and noted the old roof and paint before he decided to call.  I cut him off, telling him I was also an investor and the house was going to be renovated.  We chatted and hung up. Several months later I saw the house around the corner being trashed out.  I looked it up in the tax records and he had bought it at a very good price, given how fast prices were rising.

A good investor agent also owns rental properties.  That's good and bad.  If they spot a really good deal. they might buy it themselves.  Success for the best investor agents means they make good money on their properties and on feeding you deals.  You make them happy by buying consistently and by giving them both the buy and the sell transactions if it's a flip.

I don't frequent Bigger Pockets these days.  Too many sharks and charlatans.

If you have a bunch of people direct mailing you then I agree it makes no sense to do your own direct mail marketing campaign. But your market is not the same as other markets.  In some markets, it makes perfect sense. In others, it simply doesn't. 

Which further affirms what walt is saying.  He realized it was a good time to sell when he started getting a bunch of letters.  Props to him.