How are you finding your deals? Lets Brainstorm on what's working

[Monica Breckenridge]

I wanted to get a topic started where we can all share where you are finding your deals. We are all seeing the MLS is not working. I'll start by going over how I'm finding my deals:

1. Direct Mail Marketing to NED List. I am mailing people on the NED each week to target short sale's to create a deal. I mail them a letter each week. Each week I switch from letter to postcard to letter to postcard. All my letters are very informative. I give information about the foreclosure and short sale process in each letter. With this method I am signing up a minimum of 5 deals per week. I just signed up 3 today.

2. Other Investor-Other investors are bringing me short sale leads to process.

3. Pay per lead websites-I pay for leads online from various websites. These website scout for people who want to sell their house. A have closed many deals from these leads. Not all leads are motivated sellers.

4. Subject 2 the existing loan marketing-I am doing postcard mailings for We buy houses in your neighborhood. I have specific neighborhoods I like to buy rentals in and I do a mass mailing each month to my neighborhoods.

5. Website-I have my We Buy Houses Websites that generates leads when people search sell house in my town.

6. Blogging and social Media-This is new to me and it does take time to get this rolling. But I've started doing this for my investment companies 2 months ago and have been seeing results.

7. Avoid Foreclosure Classes and Video's. I'm doing U tube video's to help homeowners avoid foreclosure as well as doing a class they can watch in their home. I tried to do a class once at my office and nobody showed up. I think they were too embarrassed.

I am targeting specifically Short Sales and Subject 2 properties. Lets hear what you guys are doing that is successful and what kind of deals you are targeting!

[Account Closed]

You guys make it sound so difficult? Direct mail? We buy homes?! What?!

What I have been doing is to get on the REO mailing lists direct from banks. They update these once a month or so and send them out to people on their list serve, especially to those people who have closed deals and purchased from them before.

An allegory to this, I have been successful finding deals through the building of relationships with commercial bankers, especially those in the "Special Assets" division. Make friends with them, and they will give you first dibs on their distressed portfolio. And when I mean make friends, I don't mean kiss their a** but genuinely attempt to become friends whether or not you end up getting access to the portfolio. Many times, relationships will lead to more relationships.

Relationships like this have led me to virtually all the deals I have done in the last 6 months. For example, many banks have exposure to commercial loans that have hard assets like real estate as security. A lot of commercial bankers that do not sit in a real estate division have to manage distressed security like real estate, but have no ability to do so because they are literally only knowledgeable in only commercial banking. In a recent deal, I was able to purchase a portfolio of notes from a bank, where the lender borrowed tens of millions of dollars, and as part of his security was a small $4 mm RE portfolio. The banker so stressed with the commercial part of the loan had never visited the properties or even cared about their welfare. We got the portfolio for about $450k, and found that the bank was delinquent on a lot of property taxes, had not secured properties, vagrants and wild dogs living in homes etc.... However, we got the properties deed in lieu from the owner who was in bankruptcy and we have been fixing up these bad boys and renting them out.

A lot of times a good relationship with a banker will reap you benefits even for properties on the MLS. We recently purchased 2 multiunits (8 units total) that were listed on the MLS for $450k. After negotiation with the bank and going back and forth for a month or so we came to a contract price of $250k. We still had to pay the RE broker that listed the property, but the price was negotiated with the bank. He was not pleased with the price. Banks are willing to negotiate if you can cultivate the relationship. Another example, we recently were brought a deal by a Special Assets manager for a local bank. 29 unit building in a busy not so great neighborhood. Was last purchased for $1.2mm in 2004. The building is now vacant and totally ransacked and we have it under contract for $130k. Its gonna need 600k to fix it up, but even at that price, the cash on cash ROI is still upwards of 25%.

My point is hang out where bankers hang out, goto networking events, worth with non profits and people in the community. GO join the most expensive exclusive athletic clubs. Here in Chicago for example, a lot of networking gets done at the East Bank Club, athletic club of the stars and the wealthy. Play some basketball and you will definitely meet some cool cats, useful for your real estate investing business.