Using the RPM method to find Off-Market deals

[Rob Gillespie]

Let's face it; we're all after the off-market deals.

You may use the MLS to find things, but I figured I would share with you exactly how I became the off-market king over the past two decades. I have really prided myself on being able to uncover all the deals that nobody else can. When I bring them out to marketplace to wholesale, resell or rehab them, people are surprised I found them.

I'm going to show you how to do it without spending a ton of cash on direct mail. I am going to teach you how to use the RPM method.

Recognize the deal

You have to recognize the deal first. This isn't a driving-for-dollars type method. A lot of times I’ll have my bicycle or go for a run and recognize a deal, sometimes by tall grass. Some people are just Hillbillies and don't cut the grass, but for the most part if you see tall grass chances are good it’s a vacant or a rental property.

Boarded up windows with the orange stickers are also a good sign. Usually once a house is abandoned and in foreclosure, a preservation company applies the orange stickers saying this house has been winterized or has lock changes, etc.

Also look for back taxes; back taxes are really cool. You're going to find those on public records when you look online, perhaps in the records of the houses with the high grass. But be careful because if you have back taxes on an owner-occupied property, they’re not as willing to sell as a non-owner-occupied property. You're going to approach those completely differently. We can talk about that later on. Be sure to notice the fault; that means that they get rid of the foreclosure file.

Divorce, death incarceration, city violations and evictions are all some telltale signs that a property is probably going to be a good house to buy and the seller might not even know it yet. The seller doesn't have it on the market but it has all the signs that it needs to go.

Find the person

Once I’ve identified houses that could be good candidates to buy, I try to find the right person involved. That's all going to start with public records. Public records will show who is on the title, what they paid and what they owe. There are some counties around the country that may not have public records online yet, but most are.

Once you find out where they are, look at the tax mailing address. Is it the same as the house you found? If you found the house at 123 Maple Street and it has tall grass and it's showing that the owners are John and Jane Doe and they live at 123 Oak Street, that’s a different tax mailing address. If the tax mailing address is out of state, that’s even better because that's probably even more of an unwanted property.

Next go to the neighbors. You’re going to want to talk to them especially if it's an owner-occupied property and has the same tax mailing address because if one of your neighbors disappeared tomorrow chances are you're going to know where they went. By asking the neighbors a lot of times, you’ll be able to find that homeowner.

If not, use a skip trace service. There are a ton of them out there, just put in a skip-tracing Google search. The skip trace software is amazing because the more data you can put in—the tax mailing address, the actual physical mailing address, the person's name, the cities they're in—it’ll start pulling all their known telephone numbers, email addresses and mailing addresses.

Start compiling all of that between what the neighbors have told you and what you found on public records. Get all of this data in one place where you can find these folks. From there, you can go right into direct mail, text, calls or emails. You can use services that will blast call and email them, but taking the one-on-one approach and actually physically calling yourself is probably going to work best. I get a much higher response rate when I'm directly calling them versus using a telemarketing service. I’m a little bit more personable and I'm actually mentioning details about the property. One of the tricks I use is when I’m leaving a message is to just say, “Hey, I'm calling for John and Jane Doe. I'm calling actually about their house over here at 123 Elm Street and I’ve got a check here for them. I'm trying to get in touch with them.” Guess who's not going to call back when there's a check involved, right?

Make the deal

We need to make the deal and this is all done through analyzing everything. You have to analyze all the data that you've found to analyze the value of the property. What’s it really going for? Analyze the home’s condition, possible repairs—what does it look like it needs? What are the homeowners saying that the property needs? Analyze the debt; this is a very important part because you want to know how much they owe? Are they in default? Are they current? How much are taxes? Is there a first mortgage or a second mortgage? Is there a spouse or ex-spouse involved? Is it through an inheritance and has been probated?

Finally, analyze the problem. What is the problem? If you're looking at it they might think there's one problem like, “I had to move because I'm out of state.” But there might be a whole other problem. There may be city violations, or they had a tenant that abandoned the property, or there are broken windows, tall grass, etc. Find the problem and see if you can solve it. Is it that going into wholesaling the property or buying the property adding value to this deal? You want to make sure that whatever you're doing makes sense. Then you have to negotiate the deal.

Explain to them where they are, where they should be and here's how you can help them get there. You have a property, your thirty days behind in the mortgage, you have back taxes, you have tall grass, but through no fault of your own, of course. Just happens you're in Texas taking care of a family member, or whatever it is. You're owed this amount. I could probably pocket you $5,000 on top of what you’re owed. And if that's the case then we can put this deal together and make this problem go away. That's all done through the negotiations and showing them how if they deal with you, everything will be, wonderful. And if they don't deal with you, everything's going to fall apart.

To review, the RPM method is recognizing the property, locating the person and then making the deal. I know I’ve simplified this quite a bit, but it really boils down to these three steps. If you follow these steps in a series of weeks and do this every single day, you're going to be amazed at how many deals you uncover.