This is a continuation from Post #1.
Once you have found a local real estate group and have read up on the subject, the best thing you can do is take action. You will not have a very good opportunity to make a real estate investment if you aren’t proactive. For those of you that will be starting out trying to obtain some cash without a whole lot of out-of-pocket expense, wholesaling is the way to go.
A wholesaler is a person that is able to track down and put a contract on a house. The wholesaler would then typically sell the rights to that contract to an investor. The out of pocket costs and the caveat of this whole experience is finding a motivated seller. A lot of the books and GURU’s make this sound pretty easy. It’s not difficult, but you have to work hard and you MUST be consistent (something I struggle with everyday and part of the reason why I started this blog). “So how does one find these motivated sellers?”, one might ask. Great question! Look for distressed properties.
(Stop the Press…There is something I must warn you about. I made this mistake starting out and I ultimately felt overwhelmed, frustrated and quit real estate investing for a period of time. It is very important to pick a “farm” area or a neighborhood to concentrate on. I’ll go into more detail in a later post, but you are looking for older homes that are your typical 3/2/2 working class homes.)
Finding Distressed Properties
1. You can go driving for dollars and look for vacant or “distressed” properties. Telltale signs of a vacant house include: unkempt lawn, lack of a garden hose, absent window coverings, a rubber band on the mail box (the post office does this to signify that a property is vacant), buildup of fliers on front doors. Or you can troll your farm early on garbage day morning and take note of which houses do not have trash cans out by the curb.
2. Drive around and look for “For Sale By Owner” (FSBO) signs. There’s a reason why they are not with an agent. Either they are trying to save a buck and sell it themselves or they couldn’t find an agent who was willing to list the property.
3. You can buddy up with a real estate agent (buddy up with as many realtors as you can and treat them like GOLD) and have them send you expired listings for your target area.
4. Search through probate records and send postcards and/or letters to the executor of the estate. Why would they be motivated? I spoke to a gentleman that was handling an estate. It was November and the holiday shopping season was around the corner. There were 9 other heirs of which they were all women. Do you think he was motivated to not have to hear them plea for shopping money?
5. You can search for “For Rent” signs. There are lots of landlords and a lot of those are landlords by accident (inherited properties, etc.). Don’t you think some of those landlords are tired of getting calls at 3 a.m. about the leaking toilet?
6. Half of the married population is getting divorced. A lot of those divorces are not very pretty. I bet some of those end up in a bitter struggle. I think those people would be motivated.
7. People in preforeclosure are pretty motivated and unfortunately they are not very difficult to find these days. It does help if you subscribe to a list such as www.flsonline.com.
In the next post, I’ll discuss ways of marketing to these potential motivated sellers.
To be continued….