Property Finder: How to Find the Best Deals First
Property finder – as a real estate investor your skills and competitive edge are measured by how good you are at finding the best deals first.
It is no secret that the market is changing from a buyer’s to a seller’s market. Nowadays one of the most frequent dilemmas I hear from investors is “How can I find properties before anyone else does?”
Property Finder – How to Find the Best Deals First
First of all, if you really want to have the edge over the competition and find deals before anyone else does, you have to go straight to the source. That means bypass the agent, the middle-man, and go to the homeowner or the bank REO (Real Estate Owned) department. If you use the same sources that other investors do, i.e. MLS, Craigslist, dozens of internet site, which advertise for sale by owners, you are doing the same things that other hundreds of investors in your area are doing.
These are some suggestions on how to do this:
1. “Drive for Dollars” – this entitles driving around the neighborhood that you are interested in finding properties. You want to look for properties that show signs of distress, like tall grass, vacancy, neglect. Also “For Rent” signs in front of properties that do not look kept up might indicate a landlord who does not want to continue the business. A couple of hours of driving should yield at least 20 potential properties.
2. Legal Newspapers/Publications – These publications are usually found online as well via subscription. They are available for public use and information and they list upcoming foreclosures, probates, real estate and property auctions, divorce filings, and more.
3. Real Estate Agents/Asset Management Companies – Most lenders, after they foreclose on a property, hire real estate agents or asset management companies to sell their REO properties. However there is always a delay in time between the foreclosure date and the actual listing date – this is the time for the investor to contact directly the bank first, and if the bank does not want to deal with the investor (this happens with larger institutions,) it will refer the investor to their representative for the area, either an agent or an asset management company. You should try to get to know these representatives and see if you can work out an agreement to give you heads up about an upcoming property, before it is listed in the MLS. A good incentive might include that they can keep both sides of the commission and a buyer’s agent bonus (if allowed in your area.)
4. Free and Clear Properties/Absentee Owners – these are the more challenging leads to locate for a property finder, but the most rewarding. There are several sources out there, which cross reference data and compile lists of these properties. ListSource.com, Haines. com and many investors’ friendly title companies offer these valuable services. Direct marketing is the best way to approach these owners, followed by a phone call.
5. Mortgages in Default – when property owners fall behind in their mortgage payments over 30 days, this information is reported to the credit bureaus. There are lists compiled from this information, which can be obtained by the credit bureaus, like TransUnion, or ListSource.com.
If you use even one of these methods to locate properties, you will beat the competition and become a skilled property finder. Unfortunately most investors rely too much on mass methods of locating properties, which are full of competition. Eventually they get frustrated and leave the real estate business, because it is too hard to find properties, too much competition, and so forth.
Remember that the best deals are out there waiting to be located.