A question that many budding investors struggle with is, “how do I find real estate deals?” Whether you’re new to investing or seeking to diversify your investment portfolio, this guide will explain everything you need to know to get started.
From strategies for marketing properties, to tips on how to find real estate deals – we’ve got you covered in our complete investor’s guide.
What Makes a Good Real Estate Deal?
A good real estate deal isn’t merely about location, location, location—although that’s undoubtedly important. The truth is that you can find a good deal in any market. What it really comes down to is factoring in the details; purchase price, renovation costs, projected rent or resale value, and much more. The best way to analyze whether a deal is worth your investment is to calculate its return on investment (ROI) and factor in elements like neighborhood growth, quality of schools, and overall market trends.
As Christian Investors, we should take it a step further and also consider if our investments align with our values. Do they create good in the community? Do they provide a service or a home for someone in need?
How to Find Real Estate Deals: 15 Different Tactics
Finding real estate deals is a nuanced process, and what works for one investor may not work for another. However, there are various tried-and-true strategies to find promising properties. Here’s a detailed guide on each:
- Driving for dollars
- Word of mouth marketing
- Bandit signs
- The MLS
- Craigslist
- Direct Mail
- Networking
- Foreclosures, Tax Liens, and FSBO properties
- The local courthouse
- Eviction notices
- An online website
- Advertising
- Real estate auctions and probate listings
- Working with a wholesaler
- Search online
Drive for Dollars
This is a ground-level approach where you physically drive through neighborhoods looking for distressed or vacant properties.
How to Start:
- Plan Your Route: Start by identifying up-and-coming neighborhoods where you’d like to invest.
- Look for Indicators: Pay attention to signs like overgrown lawns, broken windows, or lots of trash, which could indicate a distressed property.
- Take Photos and Notes: Document each potential property.
- Research the Property: Use public records to find the property owner.
- Make Contact: Prepare a script or letter to approach the owner about a possible sale.
Word of Mouth Marketing
This strategy involves leveraging your social and professional circles to find leads on real estate deals. The better your service, the more people will talk about your expertise and recommend you to friends.
How to start:
- Clarify Your Needs: Know what kind of property you’re looking for and be able to articulate it clearly.
- Start Close to Home: Your church community, family, and friends are a good place to start.
- Extend Your Reach: The larger your network, the more leads you can get. Consider joining real estate investment groups or business networks to expand your circle.
Bandit Signs
Bandit signs are small, often handwritten, signs placed in high-traffic areas to attract leads. You’ve probably seen them driving around your own neighborhood advertising the sentiment “we buy houses in cash!” or something similar.
How to start:
- Know the Law: Familiarize yourself with local laws regarding sign placement.
- Create the Signs: You don’t need anything fancy. Many effective signs are handwritten.
- Strategic Placement: Busy intersections and community boards are excellent places to start.
- Track Your Leads: Use a unique phone number or website to track leads from this strategy so that you can assess whether this is a strategy you want to continue in your marketing efforts.
Scour the MLS
The MLS (Multiple Listing Service) is a database of homes for sale, accessible only by real estate agents.
How to Start:
- Partner with an Agent: Find a real estate agent who can give you access to the MLS.
- Set Criteria: Specify what you’re looking for to filter out irrelevant listings.
- Be Quick to Act: Good deals on the MLS move quickly, so check it regularly.
Craigslist Marketing
This involves combing through real estate listings on Craigslist for potential deals or even posting your own listing on Craigslist advertising that you are looking to buy real estate.
How to Start:
- Set Up Alerts: Use keywords like “urgent sale” or “below market value” to filter listings.
- Verify Listings: Make sure the listings are legitimate.
- Initiate Contact: Reach out to the sellers to inquire more and possibly negotiate the terms.
Direct Mail Marketing
Direct mail marketing involves sending out letters or postcards to a targeted list of homeowners who may be interested in selling their property.
How to Start:
- Build a List: Use public records to create a list of properties fitting your criteria.
- Design Your Mailer: Whether it’s a postcard or a formal letter, make sure it’s professional and engaging.
- Schedule Your Campaign: One letter isn’t enough. Plan for multiple mailers to the same list.
Network with Like-Minded Investors
Building relationships with other investors can lead to partnerships, tips on upcoming deals, and advice based on their experience. Never miss an opportunity to connect with other investors who may be able to share their unique expertise.
How to Start:
- Join REI Groups: Real Estate Investor groups are an excellent place to network.
- Attend Seminars and Webinars: These are rich grounds for meeting experienced investors.
- Share Your Goals: Let people know what you’re looking for; you may find someone with similar objectives for a partnership.
Looking for a way to begin your educational journey today? Sign up for our free master class Real Estate God’s Way.
Foreclosures, Tax Liens, and For Sale By Owner Properties
Foreclosures are properties repossessed by banks due to defaulted loans, tax liens are properties up for auction by the government for unpaid property taxes, and for sale by owner (FSBO) properties are ones sold directly by the owner often to avoid agent commissions. These are all similar types of properties that investors can take advantage of to find great deals.
How to Start:
- Research: Public records, online databases, and real estate websites often list such properties.
- Check Legal Notices: Local newspapers also publish notices of upcoming auctions.
- Contact Owners Directly: In the case of FSBO, you can contact the owner without the need for a middleman, potentially making the process quicker and less expensive.
Check the Local Courthouse
Local courthouses keep public records that can lead you to potential real estate deals. Scouring through these public records is a surefire way to connect with motivated sellers.
How to Start:
- Know What to Look For: Records like probate cases, divorce settlements, and bankruptcy filings often involve property that might be sold below market value.
- Make Regular Visits: The more often you check, the likelier you are to find a good deal.
Review Eviction Notices
Eviction notices can be an indication that a landlord is struggling with a property and might be willing to sell thus being a motivated seller. The best real estate investors never underestimate the power of a motivated seller.
How to Start:
- Find Notices: These are often published in local newspapers or online.
- Contact the Landlord: Many are willing to negotiate, especially if they’ve had ongoing issues with the property.
Make a Website
A professional website can legitimize your real estate endeavors and attract sellers. Your website is a great place to feature customer testimonials, photos and descriptions of past deals, and an explanation of your business including your values and mission.
How to Start:
- Choose a Domain Name: Make it relevant to your real estate focus.
- Design the Website: Professional, clean, and easy to navigate should be your design philosophy.
- Include a Contact Form: Make it easy for potential sellers to reach out to you.
Advertise
Utilize various advertising platforms to announce your intention to buy properties. This may sound like an obvious tactic, however, there are several top strategies that are most effective for the investor niche.
How to Start:
- Billboards: High-traffic areas are best.
- Newspaper Ads: Opt for both general and classified sections.
- Radio Commercials: Local radio stations are a good place to start.
- Car Wraps: Turn your vehicle into a moving advertisement.
Real Estate Auctions and Probate Listings
Auctions are events where properties are sold to the highest bidder, while probate listings involve properties being sold after an owner’s death.
How to Start:
- Research: Online databases often provide schedules for upcoming auctions and probate listings.
- Preparation: You’ll often need proof of funds, so be ready.
- Act Quickly: These properties tend to sell quickly and often below market value.
Work with a Wholesaler
Wholesalers find and negotiate properties, then sell the contract to a buyer for a fee. Working with a wholesaler can connect you to future deals as these investors typically stay on the pulse of their local market. Real estate wholesalers often have insider information on the best deals in the market, which could save you a lot of legwork.
How to Start:
- Find a Reputable Wholesaler: Look for ones with good reviews and a solid track record.
- Clarify Your Criteria: The more specific you are, the better they can match you with appropriate deals.
Search Online
Websites like Zillow, Redfin, Trulia and others offer vast databases of properties up for sale. Set aside time on your calendar every week to browse these websites for the latest deals.
How to Start:
- Use Filters: Narrow down your search using filters for price, location, type of property, etc.
- Set Up Alerts: Get notified when a property fitting your criteria gets listed.
What is a Real Estate Deal Analyzer?
A Real Estate Deal Analyzer is a digital or manual tool that provides investors a systematic approach to evaluate the profitability of a real estate investment. Once you’ve found a property, or real estate deal, that you are interested in utilizing a real estate deal analyzer tool can help you to figure out if it’s actually a good and profitable investment.
The analyzer computes key financial metrics like ROI, Net Operating Income (NOI), and Cash-on-Cash returns. Calculating ROI is vital to assess the worthiness of an investment. To calculate ROI, you can use the following formula:
ROI=(Net Profit / Cost of the Investment)/100
- Net Profit: Add up all your expected monthly incomes (like rent) and then subtract all expenses (taxes, insurance, maintenance, etc.).
- Cost of the Investment: Include not just the purchase price but also closing costs, rehab expenses, and any initial repairs or renovations.
This exercise will help you quantify the potential return and make an informed decision about whether or not you should move forward. In most cases, if the ROI is greater than 8-12%, it’s considered a good deal.
Get Started in Real Estate Today
You’ve learned various strategies on how to find real estate deals, each with its unique advantages and challenges. The next step is action. Remember, as you seek to grow your wealth through real estate, do so with an intention that aligns with Christian values.
Expand your real estate education by signing up for our master class: Register for “Real Estate God’s Way. In this power-packed session, you will learn the exact model for building income-scaling skills for God’s Kingdom. Hit the link to save your spot.
With prayer and wise counsel, may you find the best deals that not only benefit you but also serve a higher purpose.
