My husband and I have been in the buying & renovating real estate game for about 2.5 years now. Over the past 2.5 years we have flipped & sold 2 properties and have flipped and kept 2 properties and the most challenging aspect of flipping properties is FINDING properties that offer enough profit margin for it to make sense for us to purchase and flip.
Here are the Top 4 Ways We Acquire Discounted Real Estate
Auction: I am starting with my least favorite method of purchasing real estate. It’s my least favorite because from our experience it’s takes up the most amount of time and is the most competitive. Plus, you have no real idea what you’re getting into when purchasing property at an auction because you are not allowed to go inside to inspect the property beforehand. Now don’t me get me wrong purchasing discounted real estate is competitive but when you have people bidding on homes and giving themselves little to no equity on the purchase, it’s challenging to compete with that. We ourselves are not currently in the game to play it that risky and often lose out on properties, at auction, because we play a little more on the safe or reasonable side when it comes to equity margins.
It’s also important to note that any person can attend an auction. You don’t need a real estate license or broker or anything like that. You do however need a $10,000 cashier’s check in order participate in the bidding and if you do win a bid you have 24 hours to provide the purchase money, otherwise they keep your $10,000 deposit. Our first rental property was purchased at an auction so it’s a 100% feasible method. Just not my favorite.
Your Network: Let your network know you’re always looking for homes to buy with cash. This is actually My Favorite method for purchasing discounted real estate. We have gotten so many leads from friends, family and people from church to have us come out and make a cash offer to purchase homes. In fact, our vacation rental property (aka VRBO or AirBNB) was purchased when a nearby neighbor was having a hard time selling his home. He vented about the problem to a neighbor who suggested he talk to us. He did. We purchased the home and the rest is history! Let people in your network know that you are looking to purchase and you may be surprised with how many passive leads come your way!
Multiple Listing Service (aka MLS) : This is the platform that real estate agents use to list and sell properties. The first two properties that we flipped were found by our real estate agent using the MLS. It’s an excellent resource but because the MLS is open to such a large network of people, if you want to purchase discounted real estate from the MLS you need to keep your finger on the pulse constantly being on the look out for when that special property is listed. To help with “keeping your finger on the pulse” a real estate agent can set up parameters and have you and themselves immediately emailed each time a property is listed that is within your desired price range, location, etc. The real estate agent will then either just take a “bird dog fee” if plan to purchase and keep the home and if you plan to flip and sell the home, they will often times take that bird dog fee as well as the commissions to sell the home. I have since gotten my real estate license but our previous real estate agent (who is still a dear friend) would take $5000 finders/bird dog fee + 3% commissions to list.
Contact local probate attorneys & fiduciaries: This is another one of my favorites. We actually haven’t purchased any properties from the leads we have received from the probate attorneys and fiduciaries in our network, just yet but we have gotten a few solid leads and I am grateful to have these contacts in my network!
Probate attorneys and fiduciaries are people who manage other people’s assets including and not limited to personal real estate. Both professions encounter clients who want to get rid of real estate they have inherited or otherwise and at times don’t want to deal with the hassle of listing the property with a real estate agent at which time the attorney or fiduciary contacts me and asks us to come place a bid on the property. It costs me nothing for the lead and is a Win-Win-Win situation. The clients is happy they got a good price for the sale of their property and the account manager is happy because they get paid after all affairs are handled, including real estate sold and we are happy because we just picked up a great property without having to pay for lead generation.
I will say although I am not directly paying for lead generation, I like to keep in good contact and good relation with the attorneys and fiduciaries by bringing them treats and things to the office every now and then, so they don’t forget about us and they know we appreciate the relationship!
Well there you have it. Our Top 4 Ways to acquiring Discounted Real Estate.
If you have any additional questions, feel free to comment below or email me directly. If you found this article useful, feel free to share it with a friend! Sharing is Caring! ??