Finding Your First Real Estate Deal – Define Yourself As An Investor
Too many new investors believe that deals will just fall into their laps without an ounce of work to account for them. They assume that once they dedicate themselves to finding deals that they will be readily available. However, once it is evident that finding deals takes more work, it can be very frustrating to get your foot in the door and set things in motion. This can be all the more difficult if you are working on a budget. Fortunately, there are many ways for savvy investors to make contacts and generate leads if they are willing to work to get them.
A direct mailing campaign to distressed homeowners can quickly jump-start your pipeline. Since you do not have the luxury of deep pockets, you are forced to find deals using alternative methods. The key behind generating any new lead is always finding motivated sellers. Whether you are doing a mailing or not; if you can find motivated sellers, you will have a deal that you can work with. Sometimes finding motivated sellers is as easy as getting in your car and simply noticing a property that you may have driven past dozens of times. Other times, you will have to do a little legwork and seek out the owner. Regardless of how you do it, there are ways to find motivated sellers.
For the price of a tank of gas and a few hours out of your day, you can start finding these sellers. A distressed property is often one of the most common signs that a homeowner may be having trouble. If they do not have the money to maintain the exterior, they may not have money to pay the mortgage. This can also be a sign that the property is a rental and the landlord does not have an interest in taking care of the property. In both cases, these are properties that you should reach out to. If you are bold enough, you can start with a knock on the door and a business card in hand. You may get an occasional angry homeowner or two, but all it takes is one receptive owner to make it worthwhile. A simple introduction stating that you may have an interest in buying their property can get the ball rolling. You probably shouldn’t expect an answer on their front porch, but if you can exchange information you may get an unexpected phone call down the road.
In addition to knocking on doors, you can also find the homeowners mailing address at the town hall. You should commit to sending a letter or postcard at least six times, or until you get a response. If you get in your car for two hours a week, you should be able to find two or three distressed properties to target. If you do this for a month, you can have eight to ten new contacts or potential leads.
In addition to targeting distressed property owners, you can find a wealth of information at town hall. Many homeowners became landlords when the market collapsed and they were forced to rent their property to avoid default. A majority of these owners would be willing to sell to get out of the property but were never approached to do so. You can find addresses of landlords at town hall and commit to mailing these owners. In much the same way as you approached distressed owners, you can state that you may have an interest in buying their property. You never know which landlords are losing money because they aren’t educated to manage a property and want to walk away. If you take the time and find the owners, you have an inexpensive way to get your phone to ring.
You can also use your local newspaper as a lead source. Between FSBO listings, open houses and properties for rent, you have multiple people to market to. You should dedicate a few hours every Sunday to attend open houses and improve your local contact base. There is a reason behind every sale. If a homeowner is just looking to sell as quickly as possible, you may be able to work something out. In addition to all of the homeowners you will meet, you can grab a few realtors’ business cards and start a relationship. You can also target landlords that have properties listed for rent.
There are deals out there if you are willing to go out and find them. Driving for dollars and going to town hall is not how they find deals on TV, but you need to work yourself up to that point. There is no reason why you can’t find a deal in your first sixty days, regardless if you have a marketing budget or not. Most homeowners will not have a sign on them that they are actively looking to sell. A couple of letters or a knock on the door can quickly change your fortune ,and your business.