Sourcing Your First Deal

[Craig Curelop]

Hi everyone,

I have a 2017 goal to purchase my first 2 properties (one FHA and one conventional) in the central Florida area (Orlando, Tampa, etc.) . It seems like deals on the MLS in certain markets are drying up. Given that I do not have an endless supply of capital to deploy, what do you recommend as the best way of sourcing potential deals?

My thought is that if I do direct marketing, I may be wasting money and getting over my head with the amount of leads I can handle. However, the MLS likely does not have as many good deals. I'm curious to know how you all found your first deals?

[Tom Cafarella]

Hi Craig,

If you want to get good deals, stay far away from the MLS. It is nearly impossible to get a good deal there. You want to be fishing in a pond where no one else is, and once stuff hits MLS, you will be competing with too many people in order to get a great deal.

If you have capital, direct marketing is definitely the way to go.  You won't be wasting your money at all.  The money you save on the acquisition price will far exceed the amount you would spend on the marketing.  I wouldn't worry about getting in over your head with the amount of leads.  That would be an incredible problem to have and would be unlikely in the beginning.  

I would take the following steps:

1.  Determine what kinds of properties you want to buy.  This may sound simplistic, but you need to get laser focused on exactly what you want so that you can then plan your marketing campaigns.

2.  Build a database of all of these properties in a CRM preferably

3.  Find all of the owners contact information(cell phones, correct mailing addresses, emails, etc)

4.  Market to these people on a consistent basis:

a.  Calling them(either you can do this or you can hire someone to)

b.  Mailing them

c.  Emailing them

d.  Using facebook ads to stay in front of them

e.  Using google adwords to target them.  

If you are going to generate all of these leads, you need to properly monetize all of them, meaning that you make sure that you are making as much money on all of them that you can so that you are getting back all of the dollars you are spending and then some.  This means that you are:

1.  Buying the absolute best deals that come from these leads(you cherry pick the best ones)

2. Wholesale the deals that are just "ok" to other investors who are desperate for deals and are sick of buying on the MLS

3.  Have an agent partner that you are referring the deals to that are not interested in a true investor offer(this will be 80% of your leads)

4.  Have an agent partner who can help you generate and profit from generating buyer leads on all of the listings that you have(there is big money in this if you do it right and it is pretty easy to do)