Whether you’re a wholesaler, agent, or investor, REO properties are investments that you might want to pursue and add to your strategy.
In this article, we’ll go over everything that a wholesaler, off-market investor, and agent would need to know about REO properties and how to profit from them!
Let’s dive into the 5 ways to find cheap property!
1. Finding cheap property on the MLS
The MLS (Multiple Listing Service)! It’s like a treasure trove for those in the know. You might be thinking, “Cheap property on the MLS? You’re kidding, right?” But here’s the secret sauce: it’s all about the keyword game.
Keywords: Your Magic Wand
Dive into the MLS with these magic words, and you might just find that diamond in the rough:
“Motivated Seller” – This is a goldmine! A motivated seller often means a quicker, more flexible deal, and maybe, a lower price.
“Estate Sale” – These properties can come at a discount, as heirs are looking to liquidate quickly.
“Fixer-Upper” – Not just a trendy TV show term; these are homes needing some love, often priced accordingly.
“As-Is” – This is a clear signal that the seller isn’t interested in making repairs, which can translate into a lower price.
“Handyman Special” – Similar to fixer-upper, these are properties that need work, and their price reflects it.
“TLC” – Short for ‘Tender Loving Care’, these listings suggest a need for renovation, a hint at a potential bargain.
“Must Sell” – Urgency often leads to price reductions; these sellers are looking to close quickly.
“Divorce” – A sensitive situation, but often these sales are about speed over price.
“Foreclosure” or “Bank-Owned” – Financial institutions looking to offload properties can offer them at attractive prices.
“Investor Special” – This term is music to the ears of wholesalers and investors, indicating a property with potential for a good return.
It’s Not Just What, But How – Set up Alerts
Now, just knowing these keywords isn’t enough. Here’s the trick: frequent searches. The early bird gets the worm, or in this case, the best deal. Set up alerts with these keywords. Be relentless. Sometimes, it’s about being the first to spot the opportunity. But don’t just jump at every “handyman special.” Analyze the property. What’s the extent of the “TLC” needed? Is the price justifiable when you factor in the cost of repairs? It’s a balancing act – finding that sweet spot where the price, even with the added renovation costs, still makes for a lucrative deal.
The MLS is more than just a listing service; it’s a playground for the savvy investor. With the right approach, even in this seemingly conventional space, you can unearth deals that others overlook. Remember, every property has a story, and sometimes, that story leads to a discount waiting to be discovered.
2. Finding cheap properties with your network
Real estate wholesaling isn’t just about properties; it’s equally about people. The wider and deeper your network, the more likely you are to come across those elusive, under-the-radar deals. So, who should be in your network to maximize your chances of finding cheap properties? Let’s expand on that list:
1. Locksmiths: They’re often among the first to know when a property is being vacated, especially in distress situations.
2. Utility Workers: Like locksmiths, they’re privy to changes in property status due to their role in managing utilities.
3. Property Managers: They have the inside scoop on rental properties that might be going up for sale.
4. Eviction Lawyers: These legal professionals are aware of landlords who might be fed up and ready to sell.
5. Probate Lawyers: They handle estates that may need to quickly liquidate properties.
6. Local Contractor: They’re often aware of properties that may need too much work for the current owner to handle.
7. Postal Worker: They know the neighborhoods like the back of their hands and can identify vacant or distressed properties.
8. Real Estate Attorneys: They’re involved in various aspects of property transactions and can provide leads on potential sales.
9. Divorce Attorneys: Sadly, divorces can lead to property sales, often below market value.
10. Local Bankers and Loan Officers: They can tip you off to potential foreclosures or distressed sellers.
11. Insurance Agent: They know about properties that have had significant claims, which could be up for sale soon.
12. Gardeners and Landscapers: They might be aware of properties that are no longer being maintained, indicating a potential sale.
13. Other Wholesalers and Investors: Build relationships with them; sometimes they’ll pass on deals that don’t fit their criteria.
14. Real Estate Agents Specializing in Distressed Properties: They’re often on the front lines of finding these deals.
15. Local Government Officials: They might be aware of upcoming city planning developments that could affect property values.
Building a strong network isn’t just about collecting contacts; it’s about nurturing relationships. Be genuine, offer value, and maintain regular contact. Remember, in the world of real estate wholesaling, your network is your net worth. As your connections grow, so does your access to potential deals. Keep your ear to the ground and your phone line open – your next great find might just be a conversation away!
How to network.
Networking is more than just exchanging business cards; it’s about building relationships that benefit everyone involved. In the realm of real estate, where deals and opportunities often stem from personal connections, effective networking can be the key to unlocking those elusive, below-market deals. Here’s how you can network like a pro:
1. Quick Text or Email: Right after meeting someone, send a brief, friendly message. It could be a simple thank you, a reference to something discussed, or a proposal for a future meeting. This immediate follow-up shows you value the connection and sets the stage for ongoing communication.
2. Engage on Social Media: Digital Networking
Sharing and Commenting: If they’re active on social media, engage with their content. Share their posts, comment thoughtfully, and show genuine interest in what they’re doing. This not only keeps you on their radar but also helps build rapport.
3. Regular Check-Ins: The Quarterly Touch
Quarterly Mailers or Emails: A personalized mailer or email every few months keeps the connection warm. Share updates about your business, interesting finds in the real estate market, or even just wish them well on holidays or special occasions.
4. Offer Value: Be a Resource
Provide Helpful Information: Whenever possible, offer something of value. This could be a relevant article, a contact they might find useful, or a piece of advice. When you’re seen as a resource, your connections are more likely to reciprocate.
5. Attend Industry Events: Face-to-Face Matters
Regular Attendance at Real Estate Events: Be a familiar face at local real estate gatherings, workshops, and seminars. These are prime opportunities to meet new people and strengthen existing relationships.
6. Mutual Interests: Beyond Business
Find Common Ground: Discover personal interests you share with your contacts. It could be a sport, a hobby, or a charitable cause. Engaging on a personal level can deepen the relationship beyond just business.
7. Referrals: Give to Receive
-Referring Business Their Way: If you come across someone who needs their services, make the referral. This generosity often comes back around, making them more likely to think of you when they come across a deal.
8. Personal Meetings: Coffee or Lunch Dates
Occasional One-on-One Meetings: Invite them for a casual coffee or lunch. These meetings can strengthen the bond and provide an opportunity to discuss potential collaborations in a relaxed setting.
Effective networking in real estate is about creating meaningful, reciprocal relationships. It’s a mix of professionalism, personal touch, and genuine interest in others’ success. By implementing these strategies, you’re not just building a network; you’re building a community that supports and grows with you. Remember, in the fast-paced world of real estate wholesaling, your network can become your greatest asset.
3. Pull a list of cheap properties
In real estate wholesaling, success hinges on targeting the right properties.
There are lists available you can purchase that will give you the highest odds of finding a property in distress. These lists you can pull from Propstream or any other list provider.
Here’s a list of them you can start with:
Vacant – House has been un-occupied — Post office declares this
Divorce – couple filed for divorce and owns a house
Bankruptcy – Owner has filed for bankruptcy
Property condition – Considered “bad condition” by tax assessor
Tired landlord – A landlord who’s owned a rental for many years
Liens – Has 1 or more liens on title
Zombie properties – happens when a bank or a lender starts the foreclosure process on a borrowers home, but never goes through with a full foreclosure. While this is happening, the homeowner makes an assumption that they have lost their home so they leave the property unaware it is still in their name.
Failed listings – The listing on the MLS expired. This could be a good opportunity to put in an offer at least. They might be motivated to sell
Auction – The house will be going through an auction sale soon.
Pre probate – The owner is deceased – You’d be sending marketing to the heirs.
Pre foreclosure – A notice of default has been filed. The owner is behind in payments
By concentrating on these specific scenarios, you’re not just finding properties but identifying opportunities for mutually beneficial deals. This targeted approach is key to uncovering valuable real estate investments.
What NOT to say to them
With all these situations, the last you want to do is point out is the situation they’re in.
In other words, DON’T say: “Hi Miss Seller, we noticed you’re doing through a divorce. would you like to your house to us….”
This is extremely ineffective and you’ll get more curse words thrown at you than inquiries (if you get any inquiries).
The only thing you have to do is state your offer.
That you’d like to buy their house, and if they like to see your cash offer.
Mail, Call, Knock for Cheap Properties
With your list of potential properties in hand, it’s time to engage with a three-pronged approach: Mail, Call, Knock. This method ensures a thorough and impactful reach to potential sellers.
Begin with a personal touch – a handwritten letter or postcard. This sets a sincere tone and stands out in a digital world. Following the mail, a phone call adds a direct and personal layer of communication, building on the initial contact.
Finally, door-knocking provides a face-to-face opportunity, to showcase your commitment and interest. This comprehensive strategy – mailing, calling, and door knocking – optimizes your outreach, creating more opportunities for real estate success.
Here’s an example of the top-performing handwritten mailer that we send for our clients:
Let’s jump into a script/framework idea for your next marketing campaign…
Cold Call Script Framework:
– “Hello, my name is [Your Name] from [Your Company]. I recently sent you a letter regarding your property at [Address]. Did you get a chance to look at it?”
2. Building Rapport:
– “I understand that managing property can be challenging. I’m just reaching out to see if you might be interested in a hassle-free way to sell your property.”
3. Identifying Needs:
– “Are there any specific challenges you’re facing with the property that I might be able to help with?”
4. Presenting the Offer:
– “We specialize in buying properties quickly and without the usual stress of repairs or agent fees. Our goal is to make this as smooth and beneficial for you as possible.”
5. Closing the Call:
– “Can we schedule a time for a brief meeting to discuss this further? I believe we could provide a solution that works well for both of us.”
Door Knocking Tips and Encouragement:
– Before knocking, be prepared with information about the property and your offer. Familiarize yourself with the neighborhood to understand the potential seller’s situation better.
– Dress professionally but approachable. Have your business card and a copy of the mailer you sent ready.
3. Initial Approach:
– Begin with a friendly greeting and reference your mail. “Hi, I’m [Your Name] and I sent you a letter last week about your property. I wanted to stop by personally to see if you had any questions.”
4. Listening is Key:
– Be ready to listen more than you speak. This helps in understanding the seller’s position and tailoring your offer to their needs.
5. Highlight Benefits:
– Emphasize how your service can alleviate their pain points, whether it’s quick cash, no need for repairs, or handling paperwork.
6. Handling Rejection:
– If they’re not interested, thank them for their time and leave your card. Sometimes, they might reconsider later.
Remember, door-knocking can be intimidating, but it’s a powerful way to build trust. It shows you’re willing to put in the effort and meet them face-to-face. This approach often leads to more genuine connections and successful deals. Every door knocked is a step closer to a potential deal and a learning opportunity.
By combining mailing, cold calling, and door knocking, you create a comprehensive approach that sets you apart from other investors. This “3 prong attack” is about persistence, presence, and professionalism, key ingredients to success in real estate wholesaling.
Conclusion – Finding Cheap Properties
In conclusion, finding cheap properties as a real estate wholesaler is an art that combines strategy, diligence, and creativity. And it’s something that takes time and “reps”.
From leveraging marketing lists to engaging in direct mail, cold calling, door knocking, and employing bird dogs, each approach offers unique advantages in unearthing those hidden real estate gems. Remember, the key to success in this field lies in your persistence, your ability to adapt, and the relationships you build along the way. Whether you’re just starting out or looking to refine your strategies, these techniques provide a solid foundation for thriving in the dynamic world of real estate investing. Embrace these methods, stay committed to your goals, and watch as your efforts culminate in a flourishing real estate wholesaling business.