If there’s one thing that the “guru” corner of the internet is not short on, it’s people telling you that real estate is the fastest way to build wealth, increase your net worth, and achieve financial freedom.
But they’re not wrong…
Forget crypto, NFTs, and AI — by far the most proven path to wealth is real estate, specifically real estate investing.
And if you’re here, then you probably already know that. You also probably already know the basics of real estate investing and you’re wondering how you can find your first deal.
In this guide, we’ll show you exactly how to do that using some really simple and proven methods that still work great in 2023.
We have a free training over here you can use to pull your first list, send your first set of mailers, and get your first real estate deal!
Method #1 [FREE] – D4D & Cold Call
I’ll be honest with you.
I’m not a huge fan of this first method because it involves cold calling — which isn’t just awkward and uncomfortable… but you have to do a LOT of it to get results.
However, it is free…
So if you’ve got more time and grit than you do money, this might be the path you take to get your first deal (as many new real estate investors have done).
Here’s the process.
1. Look at a Map
Okay. Maybe you don’t need to literally look at a map, but you do need to have an idea for where you’re going to try and find deals in your market — the streets and neighborhoods where you think deals might exist.
Generally speaking, you’re looking for low middle-class areas where there are some rundown homes but the area is still nice, safe, and somewhat desirable.
2. Drive & Take Notes
If you had some money, the next step would be to simply pull a list of distressed properties using a tool like Propstream. But since we’re keeping this method low-cost (i.e. free), instead you’re going to do what’s called “driving for dollars“. This is when you drive around specific neighborhoods looking for distressed properties (which are signs that homeowners might be interested in selling for a discount).
Drive around for an hour or more. When you see a property with any of the following signs of distress…
- Lawns that haven’t been mowed in weeks or months
- Paint chipping off the outside walls
- Overgrown shrubs and gardens
- Peeling roof shingles or other structural damage
- Cracked driveway
…write down the address.
3. Skip Trace
Okay so this strategy is technically 100% free… but it’s super cheap. You’ll need to spend a little bit of money to “skip trace” those addresses you wrote down to find the homeowner’s phone numbers.
You can use Skip Genie.
4. Call Homeowners
This part is not fun.
Full disclosure — you can expect a lot of people cussing at you and hanging up.
BUT…
If you’re blessed with no small amount of grit and a strong stomach, then you can definitely find your first deal by cold calling homeowners. Here’s our full cold calling guide.
Method #2 – D4D & Door Hangers
This method is similar to the first… except it doesn’t involve cold calling.
The driving for dollars process is the same.
But instead of skip tracing those addresses and then calling the homeowners on the phone, you’re going to bring a stack of these hand-written door hangers with you…
Then, whenever you find a distressed property, walk up to the front door, put the door hanger on the knob, and walk away. That’s it.
This is a great low-cost (and low-awkwardness) way to get the phone ringing and find your first real estate deal.
Method #3 – Direct Mail
This is far and away the most effective, proven way to find real estate deals.
In fact, most experienced real estate investors send direct mail every single market — it’s a critical part of their acquisition (read: deal-finding) system.
Why?
The reason direct mail works so well for finding deals is actually pretty simple. Most people hate receiving random calls or texts from strangers — it feels invasive and annoying. Direct mail doesn’t feel that way for most people. It’s a non-invasive way you can reach motivated sellers and let them know you want to buy their house.
Having said that, there are two primary downsides to direct mail for beginners.
First, it’s cluttered. Direct mail is the most common method that real estate investors in your market are finding and contacting motivated sellers. If you send mail, you’re just joining in that clutter… and there’s a damn good chance your mailer will get missed.
The solution is to use our handwritten mailers to stand out and grab attention. These beat your competitors because they’re written with real pen-and-ink. Where your competitors get ignored… you get noticed.
Second, direct mail isn’t free. Most direct mail companies requires you to order at least 500 mailers — which can cost $1,000 or more. And this can be a big deterrent for new real estate investors.
Good news!
We now offer these handwritten mailers with no minimum order quantity!
Here’s the front…
And here’s the back…
They only cost $1 per piece and you can order as few or as many as you want. This is a great starting place if you want to test our direct mail. Pull one of these mailing lists using Propstream, set your budget, and send your mailers. Then wait for the phone to ring.
Method #4 – Contact Wholesalers
When we talk about “finding your first real estate deal”, there is a lot of nuance.
Are you trying to find and buy a rental property? Are you wanting to wholesale? Are you using the BRRRR method? Do you want to fix and flip properties?
How you find real estate deals will at least partly depend on the type of investments you’re looking for.
For example…
If you want to wholesale properties… then you probably don’t want to contact wholesalers and ask to see their deals (’cause… duh). But if you’re flipping properties or looking for rental opportunities, then contacting wholesalers can be a great way to find real estate deals (just make sure you run your own due diligence!).
You can search in Google for “real estate deals in [city]” to find wholesalers and their deals in your market.
Method #5 – Bandit Signs
If you’ve done 10 seconds of research online on “how to find real estate deals”, then you’ve probably come across bandit signs.
These cardboard signs are super common among wholesalers and real estate investors in general… but they’re also illegal. Hence the name “bandit signs”. If you don’t want to get fined by your local authorities, that’s a problem… especially since you’d be literally just giving them your phone number.
So we don’t recommend them.
However, we’d be remiss not to at least mention them since they are such a common strategy for beginners. If you want to use them legally, here are a few tricks you can use…
- Leverage Your Own Properties — It’s not illegal to put a sign on your own property. This can be particularly effective if you are lucky enough to live on a busy street in your city where the sign will get a decent amount of visibility. If you have them, you can also do this with rental properties, office space, or parking lots that you own.
- Ask Friends & Family — Have friends and family who live along a busy street? Ask them if you can put a sign in their yard to help get your real estate investing business off the ground.
- Get Permission From Local Business Owners — If you’re well-connected in your community with other business owners (you should be), then you can ask for permission to hang flyers or put out business cards on their property.
Other Resources To Help You Find Your First Real Estate Deal
In this 26-part video series, Ryan Dossey breaks down how he built his own real estate wholesaling business and went full-time as a wholesaler (and how you can, too).
In this video, Ryan Dossey will show you how he makes well over $100,000 per year wholesaling properties virtually… which means you can do it from anywhere in the world.
And here are a few more articles for you to check out from our blog…
- 10 Best Mailing Lists For Real Estate Investors In 2023
- 10 House Hacking Ideas Before You Buy Your Next Home
- Finding Deals With Direct Mail WITHOUT Wasting Money
Closing Your First Deal
Congratulations! You have found a potential property and negotiated a deal with the seller. Now it’s time to close the deal and become a real estate investor. Here are the two key sub-sections to help you navigate the closing process.
Negotiation
Before you close the deal, you may need to negotiate some final terms with the seller. Here are some tips to help you negotiate effectively:
- Be prepared: Review all the terms of the sale and make sure you understand them. Come up with a list of questions or concerns you have before the negotiation begins.
- Be confident: Show the seller that you are serious about the deal and that you have done your research. Be clear about what you want and what you are willing to compromise on.
- Be respectful: Remember that you are dealing with another person, not just a property. Treat the seller with respect and try to find a solution that works for both of you.
Legal Procedures
Closing a real estate deal involves several legal procedures that must be followed to ensure a smooth transaction. Here are some of the key steps:
- Open an escrow account: This is a neutral account that holds the funds and documents until the deal is closed. The escrow agent will ensure that all the terms of the sale are met before releasing the funds to the seller.
- Title search: A title search will ensure that the property has a clear title and that there are no liens or other legal issues that could affect the sale.
- Home inspection: A home inspection will identify any issues with the property that could affect its value or safety. You can use the results of the inspection to negotiate repairs or a lower price.
- Closing documents: The final step is to sign the closing documents and transfer the funds to the seller. Make sure you review all the documents carefully before signing and ask any questions you may have.
Closing your first real estate deal can be a daunting process, but with the right preparation and knowledge, you can navigate it successfully. Good luck!
Frequently Asked Questions
Here are answers to some more questions you might have around finding good real estate deals…
What are some effective ways to find your first real estate deal?
Finding your first real estate deal can be challenging, but there are several effective ways to get started. One way is to network with other real estate investors and professionals in your area. Another way is to search online for properties that are for sale or look for properties that are being sold through auctions. You can also consider driving around neighborhoods that you’re interested in and looking for signs that say “For Sale” or “For Rent”.
How can a REALTOR help you find your first real estate deal?
Working with a REALTOR can be helpful when you’re looking for your first real estate deal. REALTORS have access to a wide range of properties and can help you find properties that meet your specific needs and budget. They can also provide you with valuable insights and advice about the local real estate market.
What are some tips for finding discounted properties in real estate?
If you’re looking for discounted properties in real estate, there are several tips that you can follow. One tip is to look for properties that have been on the market for a long time or are in need of repairs. You can also consider looking for properties that are being sold through auctions or properties that are being sold by motivated sellers.
Where can I find real estate deals near me?
There are several ways to find real estate deals near you. One way is to search online for properties that are for sale or look for properties that are being sold through auctions. You can also consider driving around neighborhoods that you’re interested in and looking for signs that say “For Sale” or “For Rent”. Networking with other real estate investors and professionals in your area can also be helpful.
What is the process for finding great property deals as a real estate investor?
The process for finding great property deals as a real estate investor involves several steps. First, you need to determine your investment goals and budget. Then, you need to research the local real estate market and identify areas that are likely to appreciate in value. Once you have identified potential properties, you need to conduct a thorough analysis of each property to determine whether it is a good investment.
How can you calculate whether a real estate deal is a good one?
To calculate whether a real estate deal is a good one, you need to consider several factors, including the purchase price, the potential rental income, the cost of repairs and renovations, and the potential appreciation in value. You can use tools like the cap rate and the cash-on-cash return to help you calculate whether a real estate deal is a good investment.