As I travel around the country speaking for different apartment associations and real estate investment clubs, I'm often asked the question, "How do I find the property?"
Let's start by clarifying what somebody means when they ask that question. Usually what they really want to know is: "How do I find a property where I can put no money down?" Finding property worth buying is easy when you have the money. But if you're just starting out and looking for property where you can get creative, it presents a whole new set of problems in the mind of the buyer.
But it's not as complicated as you might think. First, finding money is not all that difficult. I even have a program where I'll help you find the money. (Contact me for more information on that.) And if you do that, it's as though the sky opens up and rains opportunity on you day after day.
The first thing to realize is that the best time to buy is when everyone else is selling. That's not to say you can't make money in a hot market, because you can. But the game changes a little bit. If you want to maximize returns and put as little or no money down, you have to shop where the sellers are motivated.
That means you have to think about where you're looking first. The how doesn't matter if you're looking in the wrong place. What is the market like? Are sellers more motivated than they've been in the past? Why or why not? Where is the market headed? In what way does that impact your buying decision?
Most gurus will tell you to look in the newspaper. They'll tell you to scan the commercial property and for rent section as well as post a "property wanted" ad. That's fine and everything, I teach the same thing. But that's not the only way to find motivated sellers.
Many investors avoid real estate agents like the plague because they don't trust them, sometimes for good reason. But real estate agents often know the most motivated sellers, especially when times are tough. Build relationships with agents that specialize in apartment buildings. That's key. They must work exclusively on apartments or you're probably barking up the wrong tree. Furthermore, find agents that LIST these properties, not agents who are going to show you everything that's on the market. You want to talk to the listing agent. They know the seller best. They know their motivation. They know if you're wasting your time or not. You'll get better answers to your questions, and faster. Buyer's agents just want to get ink on paper in hopes that you'll decide you found the golden egg. You don't want to go on a wild-goose chase. It's unproductive and depressing.
In some markets it's easy to get a database of properties from a title company. This works especially well if you want to send out flyers or letters to potential sellers. Pay special attention to investors who have owned the same property for a long period of time. They usually have the ability to be more creative.
If possible, drive the market. Look at properties with deferred maintenance and contact the owner. Sometimes it's as easy as talking to the on site manager or a resident, especially on properties below 50-60 units. They can be quick to give you a name and phone number of the owner if you approach them correctly.
These are just a few ways to find motivated sellers. The newspaper is great, but more often than not property is listed in the paper for a reason. It's over-priced.
Wish you all the success,
Steve Steadele
About Steve:
Steve Steadele, author of the book Multifamily Millionaire, is a successful Real Estate Investor, Broker, Entrepreneur and self-made millionaire. He is a featured speaker at Real Estate Investment Associations across the country where he shares his wealth of knowledge, experience and enthusiasm for the real estate industry. Today Steve specializes in the acquisition and disposition of investment real estate throughout the United States. To learn more about his products and services, visit his Web site at www.SteveSteadele.com.
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