Do you just watch the MLS or mostly FSBO?

Question

I'm in MA and I've been scanning the MLS for a month now and there is not that much around me that I feel is a good flip. Now, maybe I don't know what to look for but it seems most houses are way too expensive so even if I got it for a good deal it would be hard to put money in and still make money. The market is so seller centric right now any low ball offer would be laughed away. Am I missing something, should I be looking elsewhere for deals?

Account Closed · Answer

Many multiple listing service platforms are primarily a channel for retail buyers.

Ann Bellamy · Answer

Ray, I would learn to market for deals if I were you.  Do some searches here on BP for the term marketing and in the Real Estate Investor Marketing Help and Advice forum.

Having said that, the majority of deals I lend on came from MLS originally, but I agree, if you are looking around Wilmington, the pickings are slim right now.

Rick H. · Answer

Off-market means a principal (seller) who has not actively attempted to sell their property by either listing with an agent/brokerage or online and offline self-help marketing services such as eBay and classified ads.

I'd much rather work with a seller directly IF they are motivated. I deal with people who have big problems and fears really well. However, I know what I want and more importantly, don't want.

Effective direct marketing is the biggest skill that most people who want to do real estate fail to master. It ain't easy and it ain't cheap. The ability to reach the right people at the right time with the right message, get them to respond, convert, qualify, negotiate, and close is challenging. There are many moving parts. And, you haven't made your profit yet, only acquired equity at a discount (hopefully).

Find the people who've been doing this business through a few economic cycles and survived. They're the ones who can show you what works and does not.

Mike Sedlacek · Answer

I bought all my properties knocking on doors. I 'd drive done neighborhoods I want to buy in and find an old house in need of repair. I would go up to the front door and knock. "I,m interesting in buying your home. Have you thought about selling or is it for sale now?"  I got one of two answers, No or Not right now, and Lets talk. I would keep the Not right now, leads and contact them every 3 to 4 months or longer depending.

This past Saturday I talked to an elderly couple about their house which is in need of serious repair with a dilapidated front porch and old roof on the main house. I proposed to them owner financing giving them income over the next 10 years with balloon payment. They have to talk to their attorney and decide if this is something they want to do. I offered them $30,000, the neighborhood can easily support $60,000 to $70,000.

I've done these types of finds many times over the past 30 years of purchasing homes. I never spent a time on advertising or networking. I just drive down neighborhoods. SO much easier that way. Of course I only buy 3 to 4 houses a year. That's enough for me.

Ryan Detzel · Answer

I'm not the type of person to do door knocking but I'd do direct mail or Internet marketing. A quick check on Facebook shows I could target ~200,000 people 10 miles around me, age 24-65 who own a home. I wonder if that works, has anyone tried Facebook advertising?

Paul Donoghue · Answer

I totally agree with J Scott.  I find little opportunity in the MLS.

You need to learn to find off-market properties.

J Scott · Answer

A couple years ago, I could look on the MLS, and find (literally) 100 properties that would make great flip candidates.  If I had more experience and confidence at the time, I'd have been doing 100 flips per year.

Unfortunately, those days are over...  These days, it's rare (in my areas) to find good deals on the MLS or anywhere else where public listings can be found.  If someone lists a deal publicly these days, you the investor will be competing against way too many other investors (many of whom are willing to overpay), as well as competing against homeowners looking for deals.

If you want to find a steady stream of deals, you need to find off-market properties -- those are properties where the owners don't realize they are ready to sell until they talk to you.  Those are the houses where you have no competition, because you're the only one who knows the house is potentially for sale.

You find these using direct mail marketing, door knocking, cold calling, bandit signs, Internet marketing, advertising, word-of-mouth, networking, working with probate attorneys, etc.

Paul Donoghue · Answer

I look at pre-forclosures and foreclosures.

Local newspaper provides info on pre-forclosures and if the property has equity I try to get in touch with the owner.

Paul

Phil G. · Answer

I buy in NH and MA.  I primarily buy listed REO properties within 60 minutes of home.  Workable listed flips are far from plentiful, but they do pop-up.  Luckily I only do one or two deals a year, when the opportunity comes around.

Do you just watch the MLS or mostly FSBO?

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