How are you finding your deals?

[Dorian Jones]

Hey BP family hope all is well. My goal is to get a property under contract to either wholesale or partner with someone by the end of the year. If not I’ll at least have moment going into the new year but I am laser focused on achieving my goal. I have a list of addresses from list source which I am preparing to mail to. I am also going to start driving for dollars and door knocking. I have my neighborhoods selected and will focus on these pockets heavily. Also have a RE agent keeping an eye out for properties and sending me data. I am curious to know what techniques are you guys using to find properties. I know that every market differs from the next. What works for you in your city. Anyone in Los Angeles, what has worked pretty good for you specifically. Also what have you found that work in your city/town? Looking forward to your responses.

[Account Closed]

All right, fine. I live in Pittsburgh, PA. I'm a home improvement contractor. I buy and manage my own properties. I make all-cash, no-contingency offers. I've been burned by this. I expect to be burned again. I mitigate this risk as much as I can by work and study, but I do not take risks I cannot cover. I only invest in a property what I could theoretically put on the ground and burn and still have my business survive. I use my own cash or secure my loans with my own property, so it's mine to win big with or lose big with.

If you're relying on the MLS in this town to find deals, you're at least two steps behind your competition. Easily the best source of cheap leads in this town are distressed properties, and the easiest way to find them is on the monthly sheriff's sale lists. When you buy them at the auction, you have to be sure you've done a competent title search. If you don't know how you've got to pay someone to do it, and that costs money. No title search is ever perfect, and so there is some risk involved. Thankfully, doing a title search in my county is reasonably easy once you learn the process. There are plenty of people who make money off this who flutter their hands and insist it's incredible dangerous to bid on properties at a foreclosure auction, but really, it's not, once you've spent a few months learning the process and the law in your state and county. Most investors shy away from this kind of buying, and so the old adage that opportunity is often missed because it goes around dressed in overalls and looking like hard work is proved out yet again.

In an aging community like this, the second-best places to find properties right now and for the next twenty years are agents, specifically agents who are deeply embedded in their communities and have thousands of contacts. Those agents who have stuck with the game for twenty or thirty years, patiently building up giant networks. These are the agents who read the obits every morning and make notes. They always have a contact who can introduce them to the next of kin if they don't already know them. They have enough suits to get through six or seven funerals a month. They are specialists in pocket listings and sales of the estates of the dead.

These agents are always looking for cash buyers who make firm offers and close quickly. They'll take any offer to the kids of the deceased (who very often live elsewhere), and convince them that they can trust Uncle or Auntie Agent who they met when they were still kids that this is a perfectly fair price for their parent's place as-is for cash, no home inspection, no contingencies, no paint, no renovation, cash on the barrelhead in 30 days or less...because who can stand to come back to western Pennsylvania and sift through Mom's towering piles of crap, excuse me, collectibles?

How do you find these agents? That, ladies and gentlemen, is a real trick in this day and age. Because nobody calls them off an ad. They find their own business. Typically, they work for itty-bitty independent agencies, if for anyone. Don't expect to find their email addresses online, maybe as the listing agents on Zillow.com. They're definitely not here on BiggerPockets.com. They are in their 50s and 60s, members of the last vestiges of the analog world. This is their last hurrah on the American real estate scene.

One way to find them is through tradesmen. These agents know every independent plumber and electrician in their operating area. They've called all of then at some point during their careers to fix something wrong with a house for sale. So if you can find a list of licensed plumbers or electricians in your area, you can find a referral to the kind of agent I'm talking about.

An experienced agent like this is solid gold for a real estate investor, and you should make contacts with two or three in your target areas at least.

All of this of course means you had better be able to do solid home inspections yourself, because you'll never afford to pay a home inspector for all the places you look at. That means there's no hand-fluttering and mincing around about piles of junk, stink, missing appliances, busted doors and windows, ugly popcorn ceilings, damaged floors, possible asbestos, OMG, is there is mold on this wall? BLACK MOLD??? Are those RAT DROPPINGS??? You've got to actually know the product you're buying if you're going to successfully pry houses away from the clutches of the dead and their even more grasping adult children.

Now I know at least 80% of the people reading this think they're going to get into real estate as some kind of investment strategy or magical get-rich-quick endeavor and never get their hands dirty in the ways I'm describing. They want "Real Estate Sanitized For Your Protection." Let me ask you something: if a dude with a perfect manicure and bleach teeth came up to you and promised you that you could make huge money renting out portable toilets for construction sites and outdoor events, you might believe him if his numbers were convincing, right? But would you believe him if he promised you you'd never have to smell crap?