How to Have Too Many Deals Even in A HOT Market

[Wendell De Guzman]

Finding good deals is becoming more and more difficult in today's market.

Rehabbers are fighting over properties and margins are becoming thinner and thinner.

During dinner last night with an attorney who is well-connected with hedge funds here in Chicago, I learned a very interesting secret. This attorney said that he hedge funds are moving out of buying houses and now going into lending. They can see the writing on the wall - the margins are not where it used to be with investing in houses.

To make matters worse, if the flip shows on TV are any indication, newbie investors have jumped in and calling themselves "real estate investors". This makes finding good deals even harder because you're competing with newbies who are willing to pay a higher price than what an experienced investor is willing to pay.

So, how do you find good deals in today's market?

You need to find OFF market deals or properties NOT listed on the MLS. Why? If everyone's looking at the MLS, how can you find good deals there? You got to find deals outside of the MLS.

Looking at our board of properties, I can see that out of 12 houses that we have under contract, 9 are OFF-market. How did we find these OFF-market properties?

One way we utilize is DIRECT MAIL.

@John Matthews is the President of Operations for my real estate investment company and he has done a phenomenal job getting our direct mail campaign to produce off-market properties for us. We just started this but the results are exciting!

Our direct mail has a 8% response rate and out of the calls that we got, we have a 25% conversion rate. 

This means that if you mail 1,000 letters, you will get 80 phone calls and out of 80 calls, you can buy 20 houses!

What about YOU BP Nation...specially the more experienced and successful real estate investors out there? What is your ONE technique that you are using right NOW that is helping you acquire OFF-market deals?