All beginning investors should focus on one strategy. Now that you have a strategy what is your plan to find deals? Here are tips to find the best deals.
The best deals have one or more of these characteristics:
- Motivated – The seller is motivated and has a problem that must be solved. Could be operational, financial, health, loan, personal, property condition, etc.
- You can solve their problem – Investors must find out the problem and source of motivation then resolve the issue.
- No competition – With no competition investors have tons of leverage to negotiate low purchase price and favorable terms.
How to find these deals? Unfortunately these deals do not grow on trees. How about listings? It is possible to find great deals on the MLS but they are rare and with a lot of competition. Here are some ways to find great deals with some or all 3 of the characteristics above.
- Direct response mailers – Use direct response mailers to get motivated sellers to contact you. This is one of the most effective ways to find great deals and usually comes down to a numbers game. One set of mailers will not result in a ton of great deals. Consistent mailers and testing to find the right mailers formula and strategy is necessary.
- Word of mouth – You would be surprised, it could be a friend, someone at the gym, a friend of a friend, etc that gives you a lead that turns out to be a great deal. Let people know what you do.
- Bird dogs & Wholesalers – Bird dogs and wholesalers find deals for a fee. They may wholesale a property under contract to you or be a mail man or landscaper giving you a lead for a fee.
- Respond to ads – Motivated sellers put up ads for buyers. Sometimes you can stumble upon a great deal advertised on Craigslist, newspaper, online or other publications.