how do i find underground markets to buy real estate

[Kyle Deboer]

Being a beginner, the only markets that I am really tapped into at the moment are all extremely mainstream (zillow, realtor, etc.) and I see everyone saying I should learn to tap into underground markets but I can't seem to find anyone explaining how... Can anyone help with this?

[JD Martin]

Quote from @Kyle Deboer:

Being a beginner, the only markets that I am really tapped into at the moment are all extremely mainstream (zillow, realtor, etc.) and I see everyone saying I should learn to tap into underground markets but I can't seem to find anyone explaining how... Can anyone help with this?

By "underground" I assume you mean off-market deals. Well, this is harder than it sounds especially when you're a beginner because you know no one and have no track record. So why get so bent on finding diamonds that other, more experienced people with contacts are also looking for? There's almost always something worth buying on the MLS. I've bought a bunch of houses right off the MLS and they've all made me a good deal of money. You don't need to find secret houses; you need to find houses that can be profitable.

Example: about 9 years ago there was a house sitting on the market near me for $100k. It was a 2br 1 1/2 bath and it was sitting on the market forever. I got curious enough and had my agent show it to me. Turned out that the house had been owned by a family who lived there forever and ran a small beauty salon out of the house, so one of the bedrooms had been turned into the hair salon and the dining area turned into a foyer. There were exposed water lines and pipes in the rooms and missing doors. I offered the owners $50k cash and they took it. I spent about 8 hours capping and removing water and sewer lines and putting a couple of doors back in and some plugs in the wood floor and suddenly I had a 3br house. My cost for that work was about $250 and a day of my time. That house recently appraised for almost $300k. Anyone could have bought that house and did what I did; I didn't find an underground house, I just found something that wasn't being used to its best potential.