Looking for a way to uncover some great investment property resources. There are many different ways to get the good leads of properties to buy. One way to obtain decent information is by virtue of the old-fashioned way of word-of-mouth networking.
Another effective way, at least as far as I’m concerned, is to learn the business of finding and identifying potential property, which will enable you learn how to buy investment property yourself, much as any good, hard-working realtor would do.
The attractive part about that way is that you wouldn’t necessarily need to run out and get a real estate license to do so in the first place. More on that later …
Develop Your Own Low-Tech Investment Property Resources
Let’s first talk about a way to get possible leads coming your way without you doing any of the actual prospecting. Some of the real estate agents other people in the profession refer to it as farming, but I prefer to call it what it is:
Do some major-league networking. Let all your friends and family know that you intend to acquire investment property with the idea of flipping. Then, after you’ve exhausted all the close people in your life, extend this out to tour business associates, acquaintances, club members, whoever you can think of, to help get the word out of what you want to do..
I realize that the idea of networking sounds sooo ’90’s, as in the whole power-networking type of thing you used to read about when people searched for ways wanted to land that way cool job.
Well, thankfully this is not what I’m talking about here, although you do want to develop your own investment property resources version of a “power network” for flipping in a sense.
My network, as it is, consists of friends, family, business acquaintances, professionals (doctors, attorneys, accountants, etc.) real estate agents, plumbers, electricians, fire-fighters, and anyone else I can think of, and letting them know that I am always open to hearing of property they may be aware of.
And, considering this is one of the ‘lowest-tech’, and least time-consuming of investment property resources I’m aware of, it seems work pretty good.
The thing to do, is to get the word out as much as you can of your intent to flip homes, and to keep reminding people every so often. By spreading the word, you’ll cultivate relationships with people who will think of you when they hear of a possible house that’s either on the market, or getting ready to go the market.
You’ll be pleasantly surprised at how many pieces of property will eventually come to your attention simply through word of mouth.
A good example would be when an older person dies and leaves an estate for the remaining family to deal with. You know, a scenario where your friend’s mother’s aunt “died recently and their family wants sell the house right away” … If you get word of this in advance, you contact the person handling the estate, set up an appointment to see the house, and then proceed to make a deal if all parties are agreeable.
The good thing about your basic “estate sale” scenario is that the house is probably not in great shape, and that’s what you want to emphasize when negotiating the deal.
Note … As an enticement for people to help be on the lookout for you, consider offering a ‘finder’s fee’ for their services.
People will put in a little extra time into finding what you’re really looking for if they know they can make some money. Something along the lines of a flat 1% (one percent) fee for the final purchase price of the house. Obviously, a larger house in a nicer neighborhood that could prove to be very profitable.
A good example would be $1000 (1% fee) paid to the finder of a home purchased for $100,000.
That would certainly get anyone’s attention.
Try to maximize what you can right away. By that, I mean tap the people you know who might know of a house somewhere that somebody wants to unload. Get creative with your own brand of investment property resources, and start networking now. Get the word out what you intend to do.
Who To Talk To
A good place to start would be to get in touch with the following types of people as potential investment property resources:
- Real Estate Agents
- Yard Signs
- Word of Mouth
Get to know a real estate agent (or three) who can funnel property leads to you with potential to make some good money.
Realtors have the ability to know when properties come for sale before the general public does, and therefore they can know what deals are in the pipeline as well.
You may want to consider partnering with a real estate agent in some form or another in your pursuit to source property for flipping real estate. Agree to let an agent list your completed flip in exchange for a good house flip prospect. Or, if you’re pretty handy with remodeling, set up an arrangement similar to what I’ve done in the past. You handle the remodel, the realtor handles the acquisition and sale.
A somewhat offbeat but reliable source for houses might be your local tax preparation service and/or personal accountant.
Sometimes people – for whatever reason – may want to unload a particular piece of property that has become somewhat of a burden to them. If interest from a property investor (you) becomes known, they might be persuaded to sell at a lower price to get it out of their hair, and into your possession. If a person knows he/she can make some money on a house that they otherwise really don’t want, they’ll sell.
Do a little research on your local tax preparation scene, and talk to a few small independent companies to see if any properties come available indirectly this way. There are some bargains out there that usually come up around tax time.
Like accountants, attorneys have access to information when it comes to personal property that might be in a foreclosure situation, or at least on the way to being foreclosed. If foreclosure is inevitable, try to buy the property before the actual auction date. Send a letter of inquiry to the address of the owners of the property in question. Who knows? You might get a house at a real bargain.
They also handle the estates of deceased individuals that eventually may be auctioned off. If you become aware (through networking) of someone who as died and left behind some property that you may think would be an excellent flip opportunity, by all means try to contact them, or the attorney handling the estate, to get information.
Definitely in the ‘low-tech’-but-effective investment property resources category.
Put your name and number on one of those plastic (or metal) yard signs and place it in the yard as soon as you begin your flip. Let the world know what it is you’re doing. You may just find someone else living nearby who might want to sell you their house at a decent price.
Again, these are some effective, yet low-cost, low-maintenance type of word-of-mouth advertising (networking) that can help you with your sourcing needs.
Probably the easiest and fastest way to get the word out there, and for all the other reasons mentioned earlier. ‘Nuff said.