The Best Way to Find Real Estate Deals
There are several different ways you can find REO’s or bank owned properties. I personally don’t use all of them, but wanted to share with you some of the different ways to find great real estate deals. After I get through these, I will share with you what I have been doing lately to find some amazing deals.
The first way to find properties is through hud.gov (http://www.hud.gov./homes/homesforsale.cfm). This is a website which gives you information at your fingertips. You will be able to find foreclosure listings from:
• The Department of Veterans Affairs
• Federal Deposit Insurance Corporation
• General Services Administration
• Internal Revenue Service
• US Army Corps of Engineers
• The U.S. Marshal Service
• The Department of Agricultural Rural Development
Not only do they offer Single Family homes for sale but also multifamily properties as well. The great part about these services is that they are all FREE.
Just type in your State and County and they will show you all the properties you can invest in. On average, plan to spend about $500 for your deposit as a down payment.
The next online place you can search is https://www.homepath.com. When you get to the HomePath website, you will see on the home page a place where you search and find properties.
Now, here’s the deal with HomePath (FannieMae). They cater to owner occupants. Meaning they give owner occupants first crack at properties, then investors. So you may have to be patient when you come across a great deal.
Lending Institutions – Lending institutions such as banks and mortgage companies all have lists of REO properties. If they say they do not have them, ask who does, and they will probably tell you they have turned them over to a broker or agent who represents that bank or mortgage company.
Most lending institutions have offices nation wide, and are not able to keep up with the volume of REO’s that come through, therefore they use a broker or listing agent to make it easier for them.
In some cases, you may need to call corporate headquarters and find out who handles their REO properties. Chances are they may even direct you to their corporate website with all the information online. Regardless, it’s a great way to find out who the REO listing agent is which I’ll talk about next.
REO Listing Agents– REO Listing Agents are going to be a very good resource for you. An REO listing agent works directly with the banks. There is a difference between REO listing agents and listing agents.
Not all agents are equal in regards to bank owned properties. Usually you will find that banks pick one or two agents or brokers they have a relationship with, and these are the ones who have all the lists of REO’s. We refer to them as REO listing agents.
If they find out you are an investor and you PROVE to them you are serious about buying properties, they will become a huge asset to you. They only want to work with players.
If you want to locate the REO listing agents who have these lists, you will have to do a little digging and find out who represents or handles all the bank owned foreclosures. One way to find them is by asking local real estate agents if they know who handles all the REO listings.
One extremely valuable resource for finding REO listing agents is Linkedin. If you don’t have a Linkedin account, go set one up really quick. Once you are there, do an advanced search for “listing agent” in your zip code within 50 miles. If the results are too broad, narrow your search by putting “listing agent” in the title.
The reason why these listing agents are so important is because if you can build a strong enough relationship with them, a lot of times they will send you pre-list REO’s (pocket listing) that haven’t hit the MLS database yet.
This is a little known secret that I’m sure one of you will argue doesn’t happen because REO listing agent are “suppose” to give everyone an equal opportunity. Well I’m here to tell you it does happen, more than you probably think, and I will explain to you why some investors get priority access, which eliminates competition entirely.
It’s called a “double paycheck” and I’m sure you can figure out what that means… I’ll explain in more in detail on another post.
These REO listing agents are GOLD! You can make a great deal of money if you can prove you are a real player.
Birddogs – Extremely valuable once properly trained and know what they are looking for. They can be a huge help in finding great deals because if you don’t have birddogs, guess who’s going to be the only birddog? yep, YOU!
And I’m betting you don’t have the time for that at least right now.
Birddogs can be anyone. But you are looking for those individuals who are out driving neighborhoods all the time.
These are perfect birddogs because they can spot houses that look like they are empty and need repairs. These could be newspaper carriers, garbage truck drivers, mail carriers, meter readers etc. The goal here is to get them working for you and then pay them a small fee for finding you a property.
This again is what makes iFlip so attractive. It helps you attract and also trains all your birddogs for you so you don’t have to.
All you do is create an ad inside craigslist and the birddogs come to your website that is already created and trains them what to look for.
So what exactly are you looking for so you can teach your birddogs what to find? You are looking for properties that need work and are your basic starter home. Remember, you have to sell these homes so you want to sell to the largest crowd.
We are looking for starter homes that need some repair and we can pick up for .65 on the dollar minus repairs. That way we can sell it to our end buyer for .70 on the dollar and let them rehab it. We’ll go over this formula a little later in the training.
Ideally, you want the least competition as possible. So the best situation is to find a lock box on the door with no “For Sale” sign. This is a good indication that the home is vacant and the REO listing agent has just changed the locks because the property just went to auction and is now pending being listed.
There is no “For Sale” sign yet because the REO listing agent doesn’t have the listing yet. So you basically have a short window (4 – 6 weeks normally, sometimes longer) while the property is in transition, to contact the REO listing agent, let them know you are interested and make an offer.
Before you call the listing agent, you need to make sure you know what the value of the property is and what you are willing to offer. This will also be discussed a little bit later.
Now switching strategy at bit… I wanted to briefly share with you one of the things I’ve been doing lately to find some amazing deals. Deals that literally cost me $5000.00 (that’s not a typo) and rent for $700/month. I picked one up that was Section 8, for $5400 and rents for $750/month, guaranteed paycheck.
Here is a picture of it so you can see what it looks like.
Nothing special, but these are the kind of deals I am after. This house is worth about $40K. So not a bad little investment.
I’ve been finding some amazing deals right now at auctions. Now typically I don’t like to have beginners start at auctions because there is a lot that goes on that you need to understand first.
But it’s hard to lose especially when you can buy houses for $5000 or so with renters already in them. So just keep that in the back of your mind for now.
I’ll be talking more about auctions in detail and specifically how to find the best ones, how to do the research, what to avoid, etc. These auctions are very exciting and where I’ve been focusing a great deal of my time.
If you have any questions and comments, please leave them below.