Never Buy a Property that is For Sale. Especially if it's in the MLS.

If a property is for sale, someone has beaten you to it.  If you are looking at a deal that is for sale right now, you should read this.  Then you should kill that deal.

I help a lot of people get their real estate investing career started.  As a first step in this career, it makes sense to buy a property and see how it goes. But it's very dangerous.

The correct first step is this:  Set up a system to source your own transactions.  

You will conquer the real estate profession.

This works for ALL property types.  I've completed 15,000+ transactions using this methodology.  I molded it after making a ton of mistakes early on in my own career.

Here's how to do it:

1)  Find a market where there are similar properties.  If you are wholesaling houses, look for a market where the properties are similar in age and square footage.  If it's land, like me, look for similar parcels in rural areas.

2) Get a really good list of property owners in that area. This is imperative.

3) Remove all the properties that have mortgages associated with them.  No exceptions.  The smaller the list, the better.

4) Send the mortgage-less owners offers.  Don't send cute post cards or colored letters requesting that the they call you back to "talk about the deal."  All this does is upset the property owner and make you busy with useless phone calls.  Send offers.  Really low ones.

The same morning that you sent out the offers, one or two of the sellers will wake up and have this thought.  "Boy, I could really use some cash."  That's the person who will sell the property.  The owners with mortgages have the same thought, but they don't have a choice to sell.  So it's a waste of postage to send them an offer.

We ask every person who calls us back if they get many letter's.  They all say some version of this:  "Yes, but none like yours.  You made this so easy for us.  We didn't have to talk about the price. Thank you."

Yes, they thank us for buying their unwanted, undervalued real estate.

You don't need any money to start in this business (except for postage).  

Before you stuff the envelopes, find 3 - 5 home renovators who are not crooks or shady in nature.  Look in Craigslist, ask real estate agents, look for dumpsters in the driveway etc... You will have to talk to about 20 before you find a few good ones.

When you find a seller who agrees to sell their house to you for $40,000 less than its worth, call your favorite flipper.  Tell him you want $10K out of the deal.  You will have a customer for life.  

One of the biggest problems I have is getting calls from rehabers day and night asking me if I have another deal for them.  They live and die by the purchase price you set for them.

And just like that, you have complete control over your real estate career.  You make your money when you buy it, not sell it.

I bought 40 acres in Oregon this week for $2,500 and sold it for $12,500

before we funded the deal.  It was from an offer I sent out in 2007.