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Updated almost 6 years ago, 12/30/2018
Very Frustrated - can’t find good deals
Sorry folks just need to vent.
I’ve had a heck of a time finding good deals in Albuquerque. I have networked and established good relationships with 2 realtors that work with investors and a broker.
After a couple months I’ve come up empty. A lot of people don’t have cash to start but I do. I have 200k cash ready for a great deal for a fix and flip or a good buy and hold but nothing so far. Maybe I need to get more creative but finding that elusive good deal has been tough so far.
Any good advice or suggestions to overcome this problem and get going on this idea of Real Estate being the best investment I can make in my life?
Sorry just frustrated right now...
There are too many people looking to get into real estate thanks to sites like bigger pockets. eventually once all the competition dies out youre mail might actually get read by a homeowner. I am still getting my mail responded but you need to write creative letters personalized to that potential seller.
@Carlos Soto
Carlo,
I totally understand your frustration. Markets continue to tighten across the country and traditional methods of viewing and purchasing properties seem to be diminishing because realtors in certain markets are struggling to find retail deals.
Quick thoughts-
1. Attend and Network at as many RE networking groups in your local/ regional market. (If you are investing there) These are great environments to find motivated sellers (Wholesalers, Landlords, Retail, Motivated Sellers) You can also seek out opportunities to put your cash to work without buying a property through private lending. Private lending to folks that are actively buying real estate in your market or others. Gotta be super careful but it is a great way to network and put cash to work. Do your Research on how to this the right way!! (Get Your Principle Back + Interest)
2. Seek out Wholesalers/ Off Market brokers in the local/regional market. These folks are consistently searching for motivated sellers to sell/assign their properties to buyers. Pricing is generally less than working with a retail broker and they are motivated so they may treat you like a king!!!
3. If you are comfortable with seeking your property type and the formulas that help you make decision of go/no go, look at other markets. There may be deals within 100 miles or 2,000 miles but this can be tricky if you are not ready to manage people and property that far away.
It takes a mix of ways to generate deal flow to raise a real estate investor.
Good Luck!!
Sounds like getting more creative is the way to go. I've rarely found deals on the MLS. Lots of competition when they appear. Have you spent time driving for dollars, social media marketing, etc?
Best wishes! Don't get discouraged, were all seeing the same issues
@Carlos Soto Go knocking on doors, speak to your neighbors, make use of your social networks (or build some if you don't have any), source something off-market. The deals your realtors have access to come off of the MLS are already priced close to (and likely above) market. Believe in the power of cold calling, it can be frustrating but you will get leads eventually.
@Rick Trivedi A private money lender simply lends his money (similar to a bank) at a fixed interest rate (usually higher than a bank) and their money is secured by the asset itself.
I think it's one of the safest strategies to earn consistently passive returns, but you should also be aware of the deal your money is going in. Usually lenders will lend out on purchase price + rehab.
Feel free to reach out to me via DM, I'd be happy to go more in depth with you if interested!
@Damaine Senior It's a great way for investors to get involved or even get their foot in the door to Out of State Investing, especially in markets in the Midwest.
Have you considered investing in a different market? Have you considered looking for an off market deal yourself? An agent will bring you what's on the MLS. And as it was mentioned before, inventory is light all over. According to the National Association of Realtors there was a 2% drop in pended deals. Even though there was a 1% increase in November, we are still in a very slow market at the moment. It is times like these where you need to get creative to find your deals. Tell all your friends on social media that you're looking to buy a property that meets your criteria, Send out mailers to your target neighborhood, and maybe even pay someone to throw some bandit signs up for you. 2 months isn't long time. You're still at the beginning of your journey. Don't let your frustration keep you from investing! Hope this helps.
As a Real Estate Broker, when a "good deal" comes to my table, I use my (FULL DISCLOSURE) then may purchase the property myself or lock the property up and sell the property in a WHOLESALE transaction. Again, I use an attorney who has written the (for sale by owner) agreement and then pursue a buyer from there.
If you are working through real estate agents, you will have a very hard time finding ("GOOD DEALS")! There are many programs on the internet that introduce you to foreclosure properties. I suggest you use one of those outlets to help yourself.
Here is Washington state, it's a JOKE to buy a property at the auctions because they are selling for retail or over retail because of the HEGDE FUNDS and Chinese investors. Your/our money that BAILED OUT the BANKS was used to create hedge funds to BUY BACK that property that was foreclosed on by the very same bank that just got paid off by the INSURANCE COMPANY that insured them against foreclosures! Good luck with your dealings...
Now that I am trying to buy apartments I see tons of single family I can buy and make money with... But then I would not have a down payment for multifamily.
Maybe I should become a wholesaler.
@Carlos Soto I am not in your market HOWEVER I will put my two cents in on what I know my market to be which I'm sure is similar in other markets. I am a realtor and I am happy to work with ANY investor. First and foremost each investor is different and looking for properties that meet their portfolio and financial needs. True. Most properties listed on MLS are not the deals of the century however there are ALWAYS life events that occur that will push one to sell even if they do not think they want to.
Working with the diversity of investors I have found I change my strategy for finding them the property they are looking for off market. With that said, this is a slow process. I have to do a lot of marketing, digging, records look ups etc.
Some say don’t go to a realtor but my clients Realize the advantage of using a realtor to save them time, protects and negotiates for them, and money. That is IF you find a realtor that is willing to do the work and be creative in finding the property for you.
I also agree with a comment before that the current market is NOT what it once was and expecting to get the same types of “deals” as quickly and often are in fact an issue and not realistic. However, real estate is an investment that appreciates with proper care, it can make you money if you diversify your portfolio, you may have to invest in multiple properties to gain the cash flow you want etc.
Some have unrealistic expectations for today and our current market. Some want to spend $200k to $800k on a 80-100 unit building with a cap rate of 8-9%, they do NOT want to accept vouchers, and they do NOT want to use much money for rehab... Given the state of the current market this expectation in MY market is slim to none. Therefore they have to revisit their numbers and look for other ways to gain the cash flow they are wanting and to reach more realistic goals.
Like I stated. This is knowledge for my particular market. Of course in other areas this may not be true.
Good Luck. Be patient!
How many offers have you put out?
Look at your capabilities:
- People
- Niche down on the people (deals) you want to buy from. So much of this business is about trust, you understanding your customer by making Target market personas (TMPs).
- Example: Targeting only divorces and tired landlords.
- Process
- From lead generation to the closing table. If you analyze your processes I’m sure you will find that the ball is being dropped somewhere.
- Technology
- You use the TMP and your niche to create a powerful digital marketing campaign. Marketing has never been as powerful as it is today and you must be taking advantage of this.
I help investors in these areas so that their ideal flow reflects their marketing efforts so I know this process works. The problem is that postcards, real estate agents, billboards and phone calls still work, they are just less effective because they are not as targeted. So the first challenge I come into with my clients is getting them to understand a marketing mix. Keeping your most efficient and effective marketing efforts puts you ahead of the competition. Let me know if you have any more questions
If you do choose to go the modern marketing route consider:
- Who can help accomplish this goal?
- Cost?
- Timeline?
- Investment of time? Money?
- Who will manage the process?
- How will this investment impact the bottom line?
Bottom line:
If you have money to invest in your business and you are not investing in Youtube, Instagram, and Facebook, you are missing out on a lot of potential customers.
If I can help in any other way please let me know. Don't give up! You got this! :)
I see you having two options. The first is to continue to look in the Albuquerque market even though it is an expensive market and going to be very hard to find deals. Start trying to network with more realtors and get on all of the local wholesalers buyer's list, then hope and pray you find a deal. The second option which I would recommend is to find a market nearby that has less competition and therefore more deals. Maybe look for some smaller cities within a 1 hour drive and start buying there. Going to be a lot easier to find deals that way.
Any house is a deal if you get it at the right price, have you been putting a lot of offers out there? Making $15-20k if you're buying cash is not unreasonable, most people make that on a deal using hard money.
Pull the cheapest houses in the areas you're looking at and start making offers. Explain your offers with comps and rehab estimates to support them. I guarantee you'll find something that'll work.
Also, remember you have to look at your annual ROI. Doing 6 deals in a year that make $10k each is better than waiting on 1 great deal that'll make you $40k. You'll paralyze yourself from indecision if you wait forever to do a deal.
You are not alone. This has become a challenging market. Patience is needed to make a profit. Good luck.
Originally posted by @Carlos Soto:
Sorry folks just need to vent.
I’ve had a heck of a time finding good deals in Albuquerque. I have networked and established good relationships with 2 realtors that work with investors and a broker.
After a couple months I’ve come up empty. A lot of people don’t have cash to start but I do. I have 200k cash ready for a great deal for a fix and flip or a good buy and hold but nothing so far. Maybe I need to get more creative but finding that elusive good deal has been tough so far.
Any good advice or suggestions to overcome this problem and get going on this idea of Real Estate being the best investment I can make in my life?
Sorry just frustrated right now...
Carlos,
I understand your frustration. Finding good deals nowadays is a lot more difficult than in 2009.
Here are some of the things I do to find good deals:
1. I work with a few wholesalers - the really good ones. I require them to find me deals that are NOT on the MLS. One of the guys I work does 300 wholesale deals a year. That's how good he is. This guy does so much business though because he is not greedy like a lot of wholesalers out there.
2. I work with title companies - they know I am a cash buyer. I tell them if there are deals that could fall apart at the last minute that they should let me know. They know I can close so once in a while I get a sweet deal when the buyers can't close.
3. Drive around B & C neighborhoods looking for vacant homes - you know the tell-tale signs: tall grass, broken windows, etc. Then look for the owner, and call him/her.
4. Work with your city and find a list of properties with CODE VIOLATIONS - Then send them a postcard or if you can find the phone number, give them a call.
5. Work with Property Preservation Companies - these are private companies hired by the banks to secure foreclosed properties for them (change the locks, board them up, etc) prior to listing them on the market.
@Carlos Soto
There are more deals to find out states. But without a team who have high reputations will be very risky. Wholesale can be good way to find off-market deal.
I have some questions:
1: what exactly are you looking for? Flip opportunities or rental buy and hold opportunities?
2. what returns are you expecting? (I saw - 20k to 30k) that shouldn't be too difficult to find...
3. what are you willing to do or take on? ie: cosmetic only? additions? new construction? etc
4. what other avenues are you exploring ? for finding deals:
A. realtors are only one avenue
B. cold calling
C. other investors
D. Whole sellers
e. Hard money lenders
F. mailings
G. door knocking
H. FSBO
I. Expired listings
J. look for 2 bed 1 bath: where you can add a master bedroom
K. 2 bed 1 bath that is over 1000 sq ft to add 3rd bedroom within the sq ft.
etc. etc
Look for homes that are zoned for 2 units that have one small home: add the second unit: rent it out or sell it for a profit.
* the name of the game is to be creative and to take action:
Buy a home and put a camper out back: rent the main home and air b and b the camper :
Go to meet ups, on Craig list, create your own meet ups, get an instagram and facebook and tell the world you are looking for rentals and or flip opportunities.
** you should get a good deal in the next 90 days if you network, meet more people, meet more realtors, and take more action.
When I was in High School, our history teacher asked the class to write down the reason we study history. No one in the class had the answer the teacher was looking for. Our teacher told us we study history so to learn from our mistakes.
Hang in there, prices are a dropping. The time of cheap money and economic optimism is ending and cash will once again be king. Markets are cyclical, history for the most part will repeat itself. Time is the asset, leverage is the liability. As AC/DC would say, "its long way to the top if you want to rock and roll."
Best of luck brother.
If what you're doing isn't working then you need to change what you are doing! There are deals out there. Don't follow the crowd though as they are all doing the same thing.
Tips for finding deals:
1-Mail probates BUT don't do what I see everybody else doing. They mail the "Family or the Estate of ." Dig a little and find the Personal rep or executor and mail them directly. If you go to the probate docs they are usually listed there and their mailing address (in many states.) Throw out the ones where a spouse is living in the house unless they are older, like above 75. More chance they will sell especially if the survivor is the wife. If an adult child was living with them then consider not mailing them either as they have a free house unless there is a mortgage. This cuts down on cost and time.
2- Divorces- in the bread and butter priced houses you usually have two people working to afford the house. When a divorce happens neither usually wants the house because by themselves neither can afford the payments. Perfect opportunity for a Sub2. They don't have enough equity for a realtor to sell it and it may needs some minor repairs but the divorce lawyers have eaten both of their savings accounts, so Presto! You come to the rescue.
3- Eldercare- Baby boomers are headed to nursing care in droves. Build relationships with the financial departments of nursing homes and they will refer families to you. I buy many houses a year from this group.
4- Near a military base? Sub2's are a big problem solver for transfers who don't want to be an absentee landlord. I buy several a year from this source. They usual get orders to transfer and have only 90 days to sell and move.
Deals are still there but they are not going to fall into your lap like the have in the past. Only the diligent are going to survive the next few years and you have to think differently!
I only buy deals at discounts I know I can move fast, or I buy cash flow.
If you get caught with several houses in rehab as the market turns, WHICH IT IS DOING RIGHT NOW, it isn't going to be pretty for you.
honestly i think it is a terrible idea to enter the market now anyway
I'm currently exiting a large commercial construction project and lucky to do so while it's still possible.
I'm very likely going to write a check to the IRS rather than making another 1031, stay in cash for a while, or invest in other markets elsewhere
Look at the ailing stock market, the new homes construction datas, rising interest rates, trade war; people are talking about recession
I'm not saying that the market hasn't more room to grow but everything is showing that it topped out and entered a danger zone
If things go sour, you'll see many overleveraged RE genius from this forum getting wrecked. Don't be one of them
Sometimes the best deals are the ones you don't make. Continue to build and expand your network.