Average time it takes to find a deal?

Question

Hey everyone,

With the mentor-ship I'm receiving from Will, I feel so close to breaking into rehabbing. I think everything is almost in place and I'm am soon to be shopping around for my first deal so I'm just curious; what would you say is the average time it takes you to find a deal from when you start looking to closing? And what is your average closing period if you don't mind?

I'm going crazy with how energized I feel about this I need to go run for a couple miles in this nice, warm, night weather over here! Thanks everyone,

Manuel

Mark Updegraff · Answer

It depends on who says it is a deal.

The realtor?  Well, he'll show you a deal today and close you tomorrow attorney able.

What is the criteria for this deal?  What is your target return?

Solid 10 caps with commercial tenants are everywhere I look.  So if 10% return on a NNN is what your looking for, that is easy...

As the ROI goes up and the risk stays low, the difficulty in locating the deal increases.

Areas with little investor activity, and a change in employment are gold mines for both buy hold and flips.  Lots of renters / OOs looking for a place, and not many people able to navigate the Sheriff Sale / foreclosure.  Also, bank REOs are a great place to look.  They're usually in such poor shape it scares 90% of the potential offers off.  They are often priced to sell as well (but will still take a small haircut)

Hope it helps,
Mark

J Scott · Answer

Here are my reasons:

http://www.biggerpockets.com/renewsblog/2010/02/24/should-you-get-your-real-estate-license-investors/

Btw, while it wasn't my primary motivation to begin with, the best reason I now see for having your license is the ability to control your deals, especially if you'll be selling your properties (in other words, less important for those who are buying and holding).

But, access to the MLS and extra profits are two other important reasons...

Manuel A. · Answer

@J Scott Interesting. Is it mainly for access to the MLS? You deserve a Nobel Peace Prize for simply answering the main question by the way haha. Thanks.

@Charles Perkins Good point.

Account Closed · Answer

I purchase one or at most two properties a year.

There are so many factors that will influence any average that it becomes almost a meaningless number to anyone except yourself. I work with numbers all of the time.

There maybe some commonalities when describing a "deal," but good deals are not created equal.  Your exit strategy, your experience, your understanding of the market and the community can vary from other investors.  One investor might pass on a property that another investor may realize is a good deal because of their skill set.

J Scott · Answer

I have my real estate license specifically for the purpose of streamlining my investing business.

That said, there are lots of people here on BP who are doing 2, 3 and even 10 times as many deals as I'm doing, so average time is going to be relatively to a lot of other factors...

Manuel A. · Answer

@Jeff Sielicky Well I see you take a very materialistic view of a person. I am going to love making money and taking pride in real labor is great and gratifying. Besides what the media tells you, you're not better then most people in things that really matter for a happy life. And what matters more? Happiness or your money?

Yes I have great strive for labor I like, like rehabbing. I'm going to do great for my true enjoyment of this, not only because of the monetary possibilities. But hey, maybe you feel money is most important. In that case I hope it makes you happy.

@Clay Huber "Deal" is subjective and opinions of length can vary, that's why I gave a time constraint; "from when you start looking to closing".

As for wholesalers, I posted this in the rehab section to distinguish it but maybe I'll be even more specific for them next time too. Thanks.

Clay Huber · Answer

Given how subjective the term 'deal' can be, by nature, the average length of finding 'deals' is also going to be very subjective.

Not to state the obvious, but a 'deal' to a wholesaler is going to need to be different than a 'deal' to a flipper.

Jeff S. · Answer

Manuel, my point is averages distort possibilities. I hope you work harder than the average guy and do better.

Average is a c in a class. That is ok. The average person age 45-54 (according to a CNN survey) has an average net worth of $180k. That is ok too. The average appreciation in the US according to Case-Schiller is 3.4%. That is not ok. People here are putting out the effort to find properties that will either give higher appreciation than that and/or generate generous cash flow to give them higher than average total returns.

Guess that yes, on all accounts above, I am better than average.
I'd be pretty confident in saying that people on this site recognize that it is worth being above average and that taking the path of least resistance will give them less than average results.

Good luck, man.

Manuel A. · Answer

@J Scott Wow, that's a lot of acquisitions. Do you do the search mostly by yourself or through an agent?

@Justin S. That's a great perspective to look at, thanks for sharing.

@Jeff Sielicky Yes, I am average and no better then most people. Are you above average?

@Mark Updegraff I'm looking for info more about rehabbing, but I'm sure others will still be thankful. But I can still take the gist and your tip on REO's. Thanks.

I still think the case for averages matter. I'm into math and what the math says goes in my mind. Haven't some of you watched Moneyball? Using crazy averages like who's most likely to walk a base makes them more likely to walk when we know its just some crazy coincidence, but what the math says goes. I think it can be applied for my own personal thoughts still.

Thanks.

Justin S. · Answer

Manual

The systems you setup should produce you a house when you need one.  For example, I need to buy 2-3 houses per month so I have systems setup to do that.  An investor I know needs to buy 8 houses per month, so he has systems to do that.  A wholesaler I know needs to be 2-5 properties per day, so he has systems that do that.

How many can you afford at once?  1 per week, 2 per month, etc.  Think of it that way, and then create system to generate that for you.  Your purchases need to be timed so your money is always working.

Good luck.

Average time it takes to find a deal?

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