How to Secure Deals (via option) for Investment Properties?

Question

Hello,

I am a new investor and would sincerely appreciate any insight.

So far my experience is finding buyers (online) for my family's timeshares.

I have significant experience marketing online and, due to a well written ad, was able to secure a (well) above average price for their timeshares.

In fact, in regards to one deal, a lesser unit (less desirable week and size) sold for $200 while I was able to get over $2,000 just a week later.

My point is not to brag but to impress the fact that my strength is in the marketing.

Although I do have experience in the book business and know how to find value and secure deals in such a way to ensure profit / up-side, I have no idea where to begin in finding similar RE deals (I realize there is a lot more to it than books ;)

So my question is, where can one "fish" to lock investment properties / homes up at a price where there is still significant upside?  I am flooded with course offerings via email...wholesale, foreclosure, HUD, short sales, etc, etc.

I have bad credit and no cash but am willing to work very hard to make deals happen and find buyers.

Is my only shot trying to work with / for active investors?

Any insight appreciated as this would mean an awful lot to me.  Right now I'm drowning in information overload and need a starting point.

Thanks again!

Don Konipol · Answer

Scott Jay, that being the case you are going to be competing with established, knowledgeable, experienced wholesalers. They find properties they can buy below market prices by use of classified want ads, driving traffic to their website (both organically and PPC), "bandit" signs, billboards, paying referral fees to bird dogs, real estate agents, plumbers, etc, networking at real estate investment clubs, landlord clubs, or other real estate associations, contacting bankruptcy trustees, biding at foreclosure, tax and constable sales, looking for probate estate listings, driving neighborhoods looking for abandoned properties or run down properties, trolling county assessors property databases for "out of town" owners, etc. There is no easy list or website to look at that shows undervalued properties - although quite a few sellers and their agents would have you believe their properties are for sale at below market prices.

Most of these below market wholesaleable deals are houses that need major repairs - so they are wholesaled to the fix and flip set. While I personally have bought property below market and resold quickly for good size profits, I never did it without either closing first or being ready to close with my own cash if necessary. While I am sure it can be done with little or none of the wholesalers cash, it does make it much tougher to pull off.

Most of these below market wholesaleable deals are houses that need major repairs - so they are wholesaled to the fix and flip set.  While I personally have bought property below market and resold quickly for good size profits, I never did it without either closing first or being ready to close with my own cash if necessary.  While I am sure it can be done with little or none of the wholesalers cash, it does make it much tougher to pull off.

Scott Jay · Answer

Don, can you kindly elaborate on "just look at every property for sale in your niche"?

That is my question!  Where do I fish?

Is there a marketplace (some foreclosure / bank owned / etc) site where I can locate and try to make a deal on some of these properties?

I know where to sell.  I don't know where to find the properties at below market price.

On that note, I would need to put these properties under contract for a price at which there is significant upside / profit.

Although I can show value, I don't think I can magically add it.

Scott Jay · Answer

Don, I appreciate your reply.  To be balanced, I don't think I am some genius who is able to achieve above market value all the time.  I have been able to consistently write ads (within a specific marketplace) that outperform most others and command what I believe is the top end of what could be reasonably expected.

Don Konipol · Answer

If you truly have a unique ability to obtain a "higher" price through on line marketing ability, then all you really need to do is option real estate at market value, and sell for a higher price.   You will still need to learn what "market" value for each property is .... hint, it's almost definitely not appraisal value.  If you do develop the ability to determine "value" for a particular type property, just look at every property for sale in your niche and offer $100 for a 15 day option.

Actually, the real estate business is a little more complicated than this.  About the only person I have heard of that says he is successful in "internet" only real estate is Larry Goins, who has written a book about it.  But even he finds property that he ties up at prices way under market, and sells quickly for prices still somewhat under market (though I personally have difficulty with the definitions of "below" market).  You are the first I know of to believe you can market property "above" market value. But who knows, you may be on to something Big.

Bill Gulley · Answer

Then I'd suggest you market your skills to other investors, you could charge a fee for writing copy.

You marketing abilities may be in selling the sizzel and not the meat with timeshares.....especially. That is only part, a smaller part, of RE options or sales, you need to be able to demonstrate value in accepted methods, hard costs, market values and valid income projections. Selling by puffing a deal in RE can get you in trouble, legally more so than with timeshares.

Scott Jay · Answer

I appreciate your thoughts.  However, what I would like to do is tap into a pool of RE deals and lock some in via options and then market to buyers.

I really want to leverage my online marketing abilities and know that I could profit if I can lock in the deals at the right price...

Prashant P. · Answer

In my opinion you have to stop thinking about how to make money and focus on saving money if you have no cash.

From my expierence, you can read all the real estate seminars and workshops you want but if you don't have a plan and some liquid reserves you are not going to last in the real estate world.  Think about your potential investors, these guys mostly invest with cash or are using some sort of financing where they can make the most on their return.

Build a small reserve and then start investing.

How to Secure Deals (via option) for Investment Properties?

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