Brian Buffini claims that the #1 reason why real estate entrepreneurs fail is due to lack of leads. Where do you find the properties to buy as an investor?
While there are thousands of properties for sale at any given time in our region, they must be properties that an investor can buy and make a profit. That means they must be bought at a good price, or they must have opportunities for adding value. The search for the right types of property begins with a well-defined list of criteria, which is driven by the business model that you have selected for your business.
The vast majority of properties for sale in the Puget Sound area are listed properties on the NW Multiple Listing Service. Every multiple listing service is a cooperative effort among real estate brokers to share listings of available properties. These listings are marketed to real estate agents, other brokers, and posted on the internet, where buyers can access much of the listing information directly. Consequently, there is the most competition for these listing. Most of them have already been fixed up for sale, and are offered at full retail value. But occasionally investors will find fixer properties, undervalued properties (you HAVE to know values!), and properties that can be expanded by adding rooms or taking advantage of zoning opportunities.
The NWMLS has recently recognized the boom in REO and foreclosure properties, and is now requiring that listing information identify these properties as such. Some investors focus on expired listings, properties on the NWMLS that did not sell in the time period denoted by the seller, and there may be good opportunities here. Savvy investors can use the NWMLS to identify properties both with and without equity. There is a lot of information that a trained investor-friendly agent can find for an investor who does not have a real estate license. Ask!
FSBOs (For Sale by Owners) are another good source of properties. Owners are not always aware of market value, and may be frustrated by the responsibilities of trying to market properties on their own. Read the local newspapers to find FSBO ads. There are websites devoted to FSBOs, and one of the best ways to find them is just to drive around. Call on any For Sale by Owner signs you see in your target neighborhood.
Craigslist is another good source of properties for sale. Search both the For Sale and the For Rent listings, as often an unsuccessful seller turns into a reluctant landlord. Call on properties, and see whether the owner is willing to sell. Do a keyword search for listings that include such language as “must sell, fixers, forced sale, medical illness, divorce, estate, moving, relocation, TLC, etc.” Post an ad to find motivated sellers, and get them to call you.
Walk or drive the neighborhoods in which you are most interested. Write down addresses of any property that looks neglected, abandoned, or in disrepair; then look up the name of the owner in County records and contact them. Knock on doors and ask about properties that may be coming available in the neighborhood. Talk to people out on the street, like the proverbial post man, and ask for referrals. Word-of-mouth can be extremely powerful.
Get a list of target properties that meet your investing criteria from the title company, and send direct mail to owners.
Join a foreclosure group, and bid on properties at different foreclosure auctions. REDC (Real Estate Disposition Corporation) holds regular auctions in our area of lender foreclosed properties, in addition to county auctions on foreclosed properties. Check out the annual King County foreclosure auction on properties that are delinquent in paying property taxes.
Look at specialized websites for foreclosed and distressed homes available from government agencies like HUD or the VA. Talk to probate, divorce and bankruptcy attorneys. Make friends with people in senior centers and assisted living facilities.
And don’t forget about networking with fellow investors through your Real Estate Investment association! Wholesalers are looking for rehabbers, and vice versa. Most investors buy and sell property, and they should be thinking about you when they put together a list of sellers or buyers.
Happy investing!
How does King County calculate property taxes? As a new property owner, it is important for you to understand how your property taxes are calculated. It may seem somewhat convoluted, especially if you are trying to predict the cost of property taxes on new construction.
