How do you source your deals? Long post

Question

I am looking to purchase my second flip and i am having trouble finding deals worth investing into on the MLS.

on my first investment i made the mistake of buying a property that was on market price without considering the distress of the property. I knew it was not a really great deal but for my first property my goal was to learn as much as i can and atleast break even.

my question is now that i know that MLS deals are hard to find and the ones you find are taken on the spot by bigger fish, where do you source your deals? Can you please enlighten a fellow flipper(beginner)

Ko Kashiwagi · Answer

Hi Alazar,

Have you talked to the agent that sold you your first deal? Using existing relationships as leverage would be a great way to get deals. If your agent has off-market listings, perhaps they could show it to you now that you've established a relationship and have bought a deal. On market deals are tough, but there are great deals on the MLS and you also do not have to offer what is listed - if you see a property that works out with a lower offer price, you can simply put in an offer. At some point an offer will be accepted.

Off-market deals can get you great deals at discount, but it's not easy. A couple of ways to go about this is finding REO properties, foreclosures, get deals from wholesalers or build relationships with agents. You can also choose to establish your own off-market pipeline, but this will take a lot of time or money - direct mail campaigns, cold calling, driving for dollars.

Jacob Sherman · Answer

the wholesale groups on facebook are a great place to start

Gustavo Munoz Castro · Answer

I bought my first investment property off the MLS (2010) things have certainly changed!!

My best recommendations for sourcing deals:

1) Networking. Meet investor friendly agents, wholesalers, local REIA and investor meetups, tell them what you're looking for and if you have the funds, deals will find you.

2) Prospecting. Generate a list from propstream of the kinds of properties you're looking for (high equity, certain size, location, age, etc). Reach out to them (mailer, cold call, drop by, etc). Ask them if they would accept an offer? See what they say. This is a volume game.

3) Driving for dollars. Similar to #2 but its based on the eye test, looks for rundown homes in your target neighborhood. Take down the address, look up the owner and reach out.

I run a call center for Real Estate so cold calling is obviously my preferred method but by no means the only one.

Kellie Powell · Answer

You might look into Estate Auctions or Foreclosure Auctions.  Be careful what you are getting into.  Most of these homes are "as is", so if you aren't very familiar with the costs of potential problems that you can't physically see (foundation, septic, etc.), this may not be a good place for you to source.  Do your due diligence.  Look into the homes history on your county's web site(s).  Research the prior owner, property records, permits, etc. Even talk to the neighbors if you can.

Jason Park · Answer

Hey Alazar

I am local to the area and there are many wholesalers here in the DMV area. There are so many ways to generate the leads as @Ko Kashiwagi mentioned! But it comes down to if you want to personally get down and dirty to learn the work or if you want to delegate to a third party.

Hope this helps! lmk if I can assist you in any way.

Andrew Syrios · Answer

It changes. After the 2008 crash we did a lot of short sales and we got virtually all those deals through direct marketing with a few from bandit signs.

When we moved out to KC, almost everything we bought were REOs listed on the MLS.

When those dried up, we started getting a mix from wholesalers, a few hidden gems on the MLS and direct marketing. Also bought two on the courthouse steps but never really got into that.

Then we got more into portfolios of properties, which we mostly get from networking (agents, wholesalers, other contacts, etc.)

Some have also had a lot of success with SEO marketing but we haven't gotten into that much.

Shawn Parsh · Answer

Alazar,

I recommend that you tell everyone that you interact with that you are a real estate investor and tell them what kind of properties you are looking for. Everyone knows someone and you would be surprised how quickly you can start getting leads. To increase the effort others put into building my business I offer a 1,000 referral fee to anyone who tells me about an unlisted property that I buy. This has worked well for me. As suggested you can also knock on doors located next to properties that look like they meet your criteria for buying. For me I focus on distressed properties so they are pretty easy to spot.

Whenever you buy and rehab a house make sure you talk to the neighbors and tell them that you are always looking for more properties. If they see what you do to a distressed house in their neighborhood they will be a great advocate for you going forward. I've got many deals from people that lived next to houses I have rehabbed.

Oh, and just my two cents Never buy a property with the intent to break even, even if you are just trying to learn more about the business. You can learn the business while making money too and it is a lot more fun. You are in the real estate investment Business and as such the numbers will have to make sense for you to get involved. People will understand that. Good luck.

John O'Leary · Answer

Hey Alazar,

Could you share the specifics of your buying criteria? This includes factors like price range, preferred locations, and any other preferences you have. For off-market wholesale properties, I recommend checking out investrolift.com. Remember to conduct thorough due diligence as these properties often require rehabilitation. Alternatively, you could consider marketing directly to sellers as another option. Direct mailers, cold calling etc.

Alazar Wubet · Answer

This is really Valuable, thank you so much for the advice. Do you recommend any wholesaler that operates in the DMV area, or any nationwide company that's trustworthy. Also, where exactly do i look for REO deals?

How do you source your deals? Long post

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