Finding Real Estate Deals: FAQ

1. What are the most effective ways to find real estate deals?

There are numerous methods to uncover real estate deals, each with varying levels of competition. Some popular techniques include leveraging connections with other investors, scouring newspaper ads (especially FSBOs and “I Buy Houses” ads), identifying vacant properties, researching probate listings, and exploring tax sales. It’s generally recommended to focus on one or two methods initially for better results.

2. What signs indicate a property might be a good investment opportunity?

Key indicators include a property’s price, financing terms, condition, location, potential cash flow, and potential resale profit. Look for properties that align with your investment goals and require a manageable amount of work. Ads with phrases like “Owner Will Carry,” “Needs Repairs,” “Make Offer,” or out-of-state phone numbers can suggest motivated sellers.

3. How can I locate other real estate investors in my area?

Networking is key. Look for “I Buy Houses” ads in local newspapers, attend real estate investor association meetings, connect with professionals in your business network, and observe properties undergoing renovations. Utilizing online platforms like the www.CashOrTermsInvestors.com website can also facilitate connections.

4. What are the best strategies for finding vacant properties?

Focus your search on moderate to low-income areas experiencing revitalization. Look for telltale signs like unkempt yards, piled-up newspapers, boarded-up windows, and disconnected utilities. Systematically drive through neighborhoods, document your progress, and leave flyers on promising properties.

5. How can I track down the owner of a vacant property?

Utilize county tax rolls (often accessible online) to find the property owner’s information. Check for mail or notices on the property for additional clues. If necessary, contact neighbors, utilize skip tracing services, or consult code enforcement records for insights.

6. What are tax sales and how can I find deals through them?

Tax sales occur when properties are auctioned off to recover delinquent property taxes. Research your local tax sale procedures and timelines. Analyze tax sale listings, noting the amount of back taxes owed as an indicator of potential value. Diligent research and careful bidding are essential.

7. How can probate listings lead to real estate deals?

Probate involves the legal process of settling a deceased person’s estate. Heirs may need to sell inherited property to distribute assets or pay estate taxes. Monitor legal notices for probate filings, identify the personal representative, and contact the estate or heirs to express your interest in purchasing property.

8. Can eviction listings be a source of investment properties?

Yes, eviction listings can present opportunities to acquire properties after tenant issues are resolved. Monitor legal newspapers and court records for eviction cases, focusing on properties in your desired areas. Obtain the landlord’s contact information and express your interest in purchasing the property after the eviction process is complete.

Finding Deals Study Guide

Glossary of Key Terms

• Bandit Sign: A small, often illegally placed sign advertising a service, such as “I Buy Houses.”
• Bird Dog: An individual who finds potential real estate deals for investors in exchange for a fee.
• Code Enforcement: A government department that enforces building codes and property maintenance standards.
• Condemned Property: A property deemed unfit for habitation and potentially slated for demolition.
• Expired MLS Listing: A property that was listed on the Multiple Listing Service (MLS) but did not sell within the listing period.
• FSBO: For Sale By Owner, indicating a property being sold directly by the homeowner without an agent.
• Junior Lien: A mortgage or other debt that has a lower priority than a senior lien in the event of foreclosure.
• Lease Option: A contract that gives a tenant the option to purchase the rented property at a predetermined price within a specific time frame.
• MLS (Multiple Listing Service): A database used by real estate agents to share information about properties for sale.
• Personal Representative: An individual appointed by a court to manage the affairs of a deceased person’s estate.
• Probate: The legal process of administering a deceased person’s estate.
• Quiet Title Suit: A legal action to resolve any disputes or uncertainties about a property’s ownership.
• REO (Real Estate Owned): A property owned by a lender, typically acquired through foreclosure.
• Section 8: A federal housing assistance program that provides rental subsidies to low-income families.
• Tax Certificate: A document that represents a lien on a property for unpaid property taxes.
• Tax Sale: A public auction where properties with delinquent taxes are sold to recover the unpaid taxes.
• Wholesaling: A real estate investment strategy where an investor contracts to buy a property and then assigns the contract to another buyer for a profit.

Quiz

Instructions: Answer the following questions in 2-3 sentences each.

1. Why are other investors considered a prime source for finding real estate deals?
2. List three phrases commonly found in FSBO ads that suggest a motivated seller.
3. Why is it recommended to run “I Buy Houses” ads consistently, even if the ad content remains unchanged?
4. What are the key differences in how a real estate agent should be utilized when searching for Wholesale/Retail properties versus Lease Option properties?
5. Explain the concept of “expired MLS listings” and how they can be beneficial for real estate investors.
6. Describe the three phases of the foreclosure process and how each stage presents different opportunities for investors.
7. What are some key indicators that a property you encounter while driving through a neighborhood might be vacant?
8. Why is it crucial to determine the owner of a vacant property before making an offer? How can you use tax rolls to achieve this?
9. Explain the purpose of a “quiet title suit” when acquiring a property through a tax sale.
10. How can understanding the probate process provide potential real estate investment opportunities?

Answer Key

1. Other investors often wholesale properties, have rental properties for sale, or are willing to collaborate on retailing properties, creating multiple avenues for finding deals.
2. Motivated seller phrases include: “Owner will carry,” “needs repairs,” and “must sell quickly.”
3. Consistent ad placement ensures maximum exposure to potential sellers who may be reading the classifieds for the first time, maximizing the chances of finding a deal.
4. Agents are helpful for finding Wholesale/Retail deals through the MLS, but less effective for Lease Options as they typically focus on traditional sales with commissions.
5. Expired MLS listings represent properties that failed to sell during their listing period, often due to overpriced asking prices, and present opportunities for investors to acquire below market value.
6. Phase 1: Pre-foreclosure, offering opportunities to negotiate with the homeowner before auction. Phase 2: Auction, where investors can bid directly on the property. Phase 3: REO/Bank-owned, where banks sell foreclosed properties, often at discounted prices.
7. Indicators of vacancy: Overgrown grass, accumulated newspapers, boarded windows, lack of curtains, and disconnected utilities.
8. Knowing the owner allows direct negotiation and offer submission. Tax rolls provide owner names and addresses associated with specific properties.
9. A quiet title suit resolves potential title issues by legally establishing clear ownership and eliminating claims from previous lienholders or heirs not properly notified during the tax sale.
10. Probate often involves liquidating assets to pay debts and distribute inheritance, creating opportunities for investors to purchase properties from estates.

Essay Questions

1. Discuss the advantages and disadvantages of using bandit signs as a marketing strategy for finding real estate deals. Consider factors such as legality, effectiveness, and public perception.
2. Compare and contrast the different techniques for locating and engaging with other real estate investors in your area. Evaluate the benefits and drawbacks of each method.
3. Explain the importance of due diligence when purchasing a property through a tax sale. Outline the key steps involved in researching the property and ensuring a clear title.
4. Develop a comprehensive plan for targeting motivated sellers through various marketing channels, including online and offline strategies. Discuss the specific types of sellers each channel is most effective at reaching.
5. Imagine you are mentoring a new real estate investor who is struggling to find deals. What advice would you give them based on the information presented in the provided source material?