Realtors- Can You Show Me How To Find Great Deals? – Real Estate Investing

Joe: Hey, it’s Joe again. I’ve got another
question here. “I have a lot of investors who tell me that
they’d buy property from me if I can find them a good deal as a realtor, but when I
go into the MLS, the best deals sell in minutes. The rest of them aren’t all that great, especially
in this market with the prices dropping. How can I find good deals for my investors?” – James
P. in Madison, Wisconsin. Joe: You’re right. If you go into the MLS,
you can probably buy properties all day long, 10-15% under market value in just about any
market except in a really, really hot, hot market which we’re not experiencing in too
many places in the country right now. So, you can probably go into the MLS and find
properties like that, but not too many investors are going to be excited about 10% under market
value or 15% under market value unless there’s some other type of financing advantage to
do it that way. Joe: You’re absolutely right as well if you’re
looking at properties that are 20-30%, and you’re trying to find those in the MLS. Those
are very hard to find. Occasionally, they pop up but you’ve got to be quick – I’m talking
within hours – and you’ve got to be able to make an offer on those types of properties.
It doesn’t give you enough time to go to your investors and say, ‘Hey, would you like this
property?’ and then let them make a decision. You’ve got to be able to be in a position
to make the offer yourself. So that’s not the way we do it.
Joe: The other way that you can find properties, and the way I did it when I first started,
was go to HUD foreclosures, and I would get VA foreclosures and I’d do the fix up thing
– I’d do the standard real estate investing methods of fixing up the property, buying
them with credit and putting my money into them, holding them and then turning around
and selling them. Joe: In the beginning of my career, it was
great because the market was going up like mad – I could buy a property at 10% under
market value, which was about what we were getting on those VA foreclosures at the time,
because it was a really hot market in California back in the late 80’s. Then we’d turn around
and flip those properties and make a chunk of money, because they’d go up in value 20-40%,
so you’d see a 20-40% increase in value and you’re almost guaranteed to make a huge chunk
of money at the end. Joe: But when the market changed, that all
changed as well. Also, there’s only a certain amount of properties that you can buy if you’re
using loans and if you’re using your own money for down payments and for fix up. You’re only
going to be able to buy 1, 2, 3, 5 or 10 because at some point, you’re going to get stopped,
and usually, it’s right around 8 to 10 properties when you’re going to run out of money, that
is, unless you go to hard money, and hard money loans don’t always make sense because
of the interest rates and the points and all of the stuff that you have to pay.
Joe: So I don’t like using loans to buy properties to fix it up and resell. What I’d much rather
see you do is use the techniques that I teach to go after for sale by owners, to go after
expireds, to go after for rent deals, to go after general people that are out of the market
right now looking to sell their homes, etc. – all of those different techniques, i.e.
the organic techniques, the online techniques, the signs, the classifieds, the eBay, the
Craigslist, the different voice blasts and email blasts – all of those different techniques
that we use in the “Push Button Method” to find these leads.
Joe: They’ll come to you in droves. You won’t be able to keep up with as many leads as you
can get. And if you ever do get to that point, all you have to do is expand into a different
town and expand into a different state. There’s no way that you can possibly keep up with
all of the leads that you can get, using the techniques that I’ve got. So you’ll never
run out of leads if you use these techniques. Joe: And also, when you’re working with investors,
right now in this market, if you’re trying to find investors that you can work with,
a lot of them aren’t going to be able to qualify for non-occupied loans – they have to do full
docs now. They’ve got some stated income loans deals out there right now, but their interest
rates are really high; they’re up in the double digits right now.
Joe: That’ll change. The market will drop back down and it’ll fluctuate. We sell to
people that get loans and we help them find properties for rental, mainly for passive
investing, not active – we sell them to investors for passive investing that they can keep for
the long term, and we’ve done very well with that, but I think that you’re going to want
to focus on finding deals on terms and then turning around and flipping it to an investor
if that’s your choice for an assignment fee, charge them $5,000 to $10,000, or take the
equity as a note, or take some money up front and take some equity as a note.
Joe: That way, you’re a partner in it with them but you don’t have to manage it and you
don’t have to take any risk – they can be the ones that have to make sure the payment’s
made, and if the payment’s not made, then you can go to them and you can always take
the property back if you need to because you’ll be secured by your position and your equity
position will be secured by a note. Joe: So there’s lots of great ways to do that,
and work with investors. When you start building a list of investors and start sending them
out an email… I’ve got a newsletter series, actually its part of the Mentor Program and
it’s called ‘Building A List Of Investors’. It teaches you how to build a list; it teaches
you how to send out a newsletter to them. I’ve even given you articles that you can
send out to teach them about the process. Joe: There’s also an audio that you can listen
to. I think I’ve told you about it before. (all one word, all lower
case). If you go to that website, there’s an audio there that teaches you about long
term investing which you can use to help your investors. If you can use that knowledge and
that information to help your investors understand why it makes sense to hold property long term,
even if it’s got negative cash flow (because negative cash flow is not necessarily a bad
thing for everybody) and the tax benefits and all of the other things that can come
out of buying property. If you have that knowledge, it’ll be easier for you to sell it to investors
and for you to write your newsletter. Joe: Now, with the newsletter that you’re
going to be sending out to your investor list every week, you’re also going to add in properties
that you’ve got for sale. And so as your investor list grows, every time you get a property,
you can send it out to your list, and you’re going to sell it instantly, well, not always,
but it’s going to be very likely that you can, and we’ve certainly done it very quickly.
Joe: I’ve been in a situation where I’ll send out an email and I’ll sell an entire subdivision
of fifteen or twenty properties in a matter of a few hours, to where all I have to do
is be on the phone, and I’d never even been to the subdivision – I just got pictures,
I got inspections and I did everything remotely because I wasn’t even in the state where they
were at. Plus, they’re going to be filled by property managers that we have in place
to do it and I was buying properties there myself, so it gave it a little bit of credibility.
So you might want to keep some for yourself, just to show your investors that you’re serious
about investing in property as well. Joe: So, you’re playing both sides of it:
you’re getting the cash flow from the investors and you’re getting the long term wealth from
keeping the properties. I hope that helps.

One comment

  • is it possible to find an investor that would buy a property with negative cashflow and equity and pay me 5k?

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