This is the first part of a 4 part series. Stay tuned for links to the additional parts.
How to Find Deals
For me, this is the toughest part. It’s funny – some people will find this part easy. They don’t mind talking to people and asking them for things. I hate it. That makes this part the hardest for me.
Deals come from hitting the pavement and hustling. Sadly, they rarely come from brokers and internet searches. The ones you find on there will be premium retail deals where it is tough to make money. The brokers will take their fee from the seller, resulting in a higher price. To find good deals, you need to go off-market.
Off-market means work. At its most basic, it requires you to get connected with potential sellers. These are people who likely want to sell, but due to some reason have not approached a broker. They are looking for an easy button. They might have a pain-point, but it’s not one that is forcing them to sell. Otherwise, the property would be listed.
There are many websites out there who claim to help you find properties for a fee. Crexi and Loopnet can be used for free, but often the seller has had to pay to get listed on there. Again, that takes money off the top. Finding deals yourself will be harder.
The best way is by sending letters. These are the least annoying to owners (versus text messaging and cold-calling). But, to do that, you need to have addresses. Here’s a cheap way to do it:
Go on Google maps and look at the satellite view in the area you are interested in. Look for rectangular roofs with commercial style parking areas. Look at the image below. These are probably two 4-plexes side by side with garages in the back. Write down the address in a spreadsheet.
Go to the graphical information system (GIS) in your county and look up the address. It will list the owner. It’s often an LLC. Write that down and go to the secretary of state website in your state and find the registered agent. That listing will have the address. It’ll be the owner or their attorney.
Do this hundreds of times with hundreds of hours (sorry!) of work and you’ll have a big list. Use that to mail-merge and start sending letters with a handwritten address on the front. That’ll ensure they get opened. Plan a campaign of at least 7 letters to send over the course of a few months. Be prepared to answer your phone right away. Document leads that come in this way.
I’m planning on paying an up and coming investor to do this for me. I think it’ll be a great synergy. Next time, we will talk about underwriting and closing.
