How I used to make money and ideas for making money now

How do you find a deal in 2020? My real estate career started during the Great Recession. Appropriately named "GREAT" because I was finding GREAT deals everywhere. I was able to pickup properties that have tripled in value. Today, I am struggling. I wanted to at least share with people how I used to find deals and where I still look.

During the recession it was straight off the MLS. I found the best deals on homepath.com and homesteps.com. They are HUD foreclosures that had usually been fixed up for FHA buyers. Great deals at the time and this is still where I see the cheapest MLS listed homes. As the economy improved I went to the online auctions like Hubzu, Auction, & Xome. I was on their VIP list & was buying from all of them, fixing, and selling. It was great because I was doing something that everyone else wasn't, they had a tremendous supply, and the auction service didn't have a great grasp on what their inventory actually was. They would have a 5 bedroom 2400 Sq FT house listed as a 2 bedroom 1200 Sq FT house. SCORE. Today the Auction companies have very little inventory near the metro, most of their listings are post foreclure during the redemption period so you need to have a great understanding of Minnesota title law to try and scoop up a deal. It really just makes it too difficult for the average investor to find a deal that works.

So what now? I would suggest contacting an agent, Cora at 10k realty, to get put on an MLS search and get prequalified. When a deal comes up you have to act fast. Also, take a look at the properties that have been listed for about 90 days and make that 75% offer. Many agents don't want to to do this, waste of time blah blah blah, but Cora with 10K Realty does.

If an investment property is financed over 30 years the cashflow can still be good. People often think that it is better to pay off a property sooner than later. However, if a recession comes would you rather have to come up with a big mortgage payment or a smaller mortgage payment every month? The way to start is to use up your conforming loans. Each person can have 10 30 year conforming mortgages. So, if you're married that's 20 loans at the current historically low rates. I didn't know this when I started so I put all of my loans on 15 year Fixed (5.5 with a prepayment penalty). It's great that they will be paid off in 7 or 8 years, but I'm losing money on the golf course and could use the funds now! Plus, leverage is the best part of real estate. Turn 1$ into 5$ instead of turning $1 into $1.07 or $1.08 and paying a broker to do it for you via the stock market. The more equity that you have in your property the lower your return will be. Example if I buy a 100k house with 100% cash and net a 10k a year profit that's a 10% return (10000/100000). If I buy a 100K house and put down 20k and only net $3568 (because I made 12 536$ monthly payments) that's a return of 18% (3568/20k). Behold the power of leverage. Unless you inherit money or win the lottery we almost have to find a way to leverage money or people to achieve double digit returns. The best part about real estate is that with depreciation I would probably make that 18% tax free. Panhandling, real estate investing, and exotic dancing have to be some of the last great tax havens!

This market is competitive, but I see deals every day. In fact, I will continue to try and post a deal a week. There was a duplex I was going to go see last week in Cambridge. I own a property across the street and Karen only wants to buy apartment buildings, but I knew it was a deal at 128900 and planned to low ball since it had been on the market awhile. Well, when I went to schedule the showing it had actually closed the day before for $83000. What the hell. That's an awesome deal at 40k a door, maybe $1600 Gross rent and a payment of 500$. That duplex should have been mine and I blame Karen

:). Moral of the story. There are deals to be had. Cora works with me and she will work with you to find deals like this. I would suggest getting pre qualified with an awesome lender like refined lending and calling Cora at 10k Realty today!

Should be in my portfolio........
121 5th Avenue NW, Cambridge, MN 55008-3806

Status: Sold
List Price: $128,900
Sold Price: $83,000
Seller Cont: $
Original List Price: $143,900