One of the keys to rehab success is finding good deals. You can do great work and have a solid team behind you but if you can’t get discounted deals it may not make a difference. There are times in every investors career when you will struggle finding deals. The usual methods aren’t working and you are slowly becoming frustrated with your market. Instead of reaching for other markets or taking on deals you know don’t make sense you should change your approach.
There are dozens of ways you can find new deals. Some of them require a little more work or take a little longer to yield results but they can be effective if you stick with them. In the world of fix and flip real estate you are only as good as the leads you generate and the type of leads you produce. Here are five out of the box techniques you can use to find discounted deals.
- Expired/outdated listings. Simply targeting homeowners in foreclosure or facing a short sale doesn’t always produce results. There is more competition for these leads than ever before. As good as they can be they are difficult to find. You are better off targeting expired or outdated listings. Ask your real estate agent for any listings that have been on the market more than 90 days. The longer they have been on the more likely they will be open to negotiation. If a home has sat on the market for six months it is a good indicator that there is either something wrong with the property or the list price was way too high. Either way it doesn’t hurt to reach out to the homeowner or the listing agent to see what is going on. They may be fed up with the process and are looking for any reasonable offer to move on.
- Local newspaper. I know what you may be thinking “nobody reads the newspaper anymore.” While newspaper readership and circulation has declined in recent years there is still a large segment of people who rely on it. There are a handful of potential lead sources in your local newspaper. Start by looking at any listing that is for sale by owner. As the name indicates these are listings where the owner of the property is handling the transaction without a real estate agent. Depending on how active the listing is they may be starting to realize just how difficult selling on your own can be. They may not be ready to sell right now but if you leave them your contact info you can set something up down the road. You should also look at the divorce filings or any advertisements for divorce attorneys. Couples going through a divorce usually need to sell their property quickly to divvy up any assets. They may take a quick sale over trying to squeeze every dollar from the transaction.
- Personal network. If you have been in the business for some time you have probably built a large network you can use in your favor. As you are searching for deals now is the time to reach out to them. Regardless of the industry people are reluctant to ask for business. You will be surprised how many replies you will get by sending out an email to your contacts asking if they have anyone who may need your assistance. If you have 50 contacts there is a good chance at least five will respond. Out of those five you may be able to get a deal. In addition to sending out emails you also need to stay on top of networking meetings and investment clubs. It is easy to mail these in when you are looking for deals but now more than ever you need to go and put your best foot forward.
- Craigslist. There are more real estate listing and rental sites than ever before. Craigslist is still an effective lead generator. In much the same way as a local newspaper there are several ways to utilize Craigslist. The most obvious is by looking at discounted real estate for sale. Most of the listings are done by fellow investors so you may need to find a good wholesaler on the site to make it worthwhile. Another way to find good deals here is by looking at the rental listings. Any listing that has an immediate opening may have trouble finding tenants. With that they may be frustrated with the process and are simple looking to sell and move on. If you reach out to ten landlords you can bet that one has had it and will be willing to consider a deal.
- Eviction lists. The judicial website for each state can be yield a treasure trove of leads. In addition to new foreclosure filings they also have recent evictions for an individual town. On the docket you should be able to find out the subject property in addition to the owner’s name and primary address. You can then write them a letter explain who you are, what you do and see if they would have any interest in selling. If you are ambitious enough you can search their name and find their email address or even their phone number. If you opt to go the letter route you should plan on sending them a letter a week for at least a month.
There are a variety of unique ways to find deals. Most of these methods are inexpensive but can be effective if you stick with them.