How do you find deals for your buyers?

Question

I would love to hear what other agents around BP are doing to help find their buyer clients deals. There are never enough good deals on the MLS. We always submit lower offers but they end up selling regardless. I am on every single wholesaler's list in our area-none of them actually have good deals. They are always overpriced. I have been in this business really close to 10 years now and am starting to feel that working with investors is just no longer doable. The competition is just too much. I am now starting to attack this problem with my investors by telling them: "What is the max price the deal still makes sense and let's offer that" just so I am no longer wasting my time and neither are my clients. What are your thoughts?

Lucas Thomas · Answer

Hello!

I have been an exclusive investor agent for the last decade, usually representing landlords preferably.

First off, what type of investors are you representing? Landlords, fix n' flippers, businesses, developers, etc.?

If its landlords, your market might be in a situation I like to call in the most professional verbiage possible, "TOAST."

As a landlord agent, I've had to move to other states to get my investors what they want, and have been forced out of 4 of them already by rising prices and the few I am left in, are slowly burning out. However, I'm a Cash-Flow Investment Agent. If your landlords, are "Equity Play" landlords, you have to find out more of what they want from their investment as equity plays can "break-even" and an Equity Play landlord is fine with that. Just have to identify what the best "Break-even" makes sense for them.

If your working with fix n flippers, then you are going to have to become a wholesaler yourself and build a wholesale system. That is the only real way to find your fix n flippers deals if your wholesalers are eating all the profits and the MLS market is on fire.

If your representing a business investor, then your in luck as its a weird niche that is never really ON FIRE. I really like this niche because their isn't a lot of competition in the different industries.

If your looking for a developer, then your going to have to cold-call some vacant landowners and FSBOs. Might get lucky.

But basically, if your representing landlords, your market might be "TOAST".

If your representing fix n flippers, you have to become a wholesaler and go after decrepit properties and outdated FSBOs. And there is a million wholesaler forums on here to see how those work.

If your doing businesses or developers, just have to figure the niche out.

Hope this helps.

L. Thomas

Mohammed Rahman · Answer

Hey @Stephen Barton - competition is a good thing in the market.

If you're seeing more price points that are higher than the norm typically it means that either the market is shifting gradually up or that there's multiple people involved in that deal "chain" before it gets to you and everyone is adding their markup.

My advice would be to attend a few local meetups to brush shoulders with other investors to pick their brain about whats working in your market AND to start marketing direct to sellers instead of trying to get the deals from wholesalers.

You'll have more work to put into it as it takes several months before being able to get a deal, but the margins will be bigger.

Jonathan Greene · Answer

From what you wrote @Stephen Barton, you aren't working with the right investors or you aren't coaching them to be successful in a competitive market. We all have had those investors, those are the first ones I fire, the ones who only will go low. That is not a winning strategy as @Peter Tverdov said. We work with hundreds of investors on my team and we train them to do business the way that we do - honest, transparent, and aggressive, but fair.

Never abandon investors are an agent. Regular home buyers do 1 deal every 7-10 years. A good investor can do 7-10 deals in one year. Remember this, just one good investor can double, triple, quadruple most agents business so stop trying to work with them all and pick the best couple and go the extra mile for them and start sourcing on your own. Forget wholesalers, if you are on the list, those are third helpings.

Peter Tverdov · Answer

80% of my realtor businesses is real estate investors in New Jersey. Set expectations upfront with the immediately. Do not write up way under asking offers that just hit the market. Stupid and a waste of everyone's time. They trust me based on my rep on social media, Youtube, etc and if they don't trust me, they learn after 1-2 offers are submitted (not high enough) and they do not get property. It sells and I forward the sold price to them. Then they start trusting me lol.

The ones asking you to reduce your commission and low ball, cut them and move on.

Lucas Thomas · Answer

Yeah.  My market is Phoenix where all the prices have quadrupoled and everything makes negative cashflow.

Have you tried multifamily for your landlords?

I checked Redfin and I'm seeing properties at around 75-90k a door. Which is great! I'd buy there as I actually looked into it, but decided Wisconsin and Ohio. I usually go up to 15 units.

https://www.redfin.com/county/862/IN/Marion-County/filter/pr...

Stephen Barton · Answer

Thanks Sheena! Yep just trying to look outside of the box and find out what other agents are doing to source their deals. This is great stuff! Thank you so much!

Sheena Konas · Answer

Hi @Stephen Barton! It is tough out there right now but I feel like getting good deals lately is something I have had great success with. Honestly, I think the thing that has worked the best for me is forming great relationships with other agents in the area and being strong with my communication. Don't ever be afraid to ask questions to other agents, the worst they can say is no (I still have to remind myself this when I have to call the "not so nice" agents). Good luck!

Stephen Barton · Answer

@Mohammed Rahman I love this! I need to get back to my roots. That is where I started out- in the rooms of investor meetups in my area. This is exactly the medicine I need. Thank you sir!

Beth Rook · Answer

Stephen, you're in Indianapolis? There is a wholesale group that meets once a month.  I visited one of their meetings a while back when I was in the area. They met at The Speak Easy.  Look up subREIA, Simple Wholesaling-Ronnie Reese.  They seemed like a nice and ethical group of people to me.

Brett Deas · Answer

I started to feel like this recently as well. My wholesaler partnerships have turned out some amazing places, but it is few and far between now.

I have started to lean on exclusive wholesaler partnerships and people just getting started. Often times they find 1 or 2 good deals and peter out, but that's still 2 deals I wouldn't have found otherwise.

How do you find deals for your buyers?

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