Real Estate Investing 101
Finding the Deal

Real estate investing 101 lesson. Finding the deal is probably the most important part of the whole investing aspect. Because you have to go through many bad investments in order to find a good one - where do you start?

Right now I am working very hard to find another investment property. Since I just closed on the sale of my last property which left us with a good profit and a lot of new knowledge I am eager to get going on another deal.

My goal for this year was to buy at least two houses so I really need to get cranking on this because this second house needs to be repaired and rented or sold before Thanksgiving. A real estate investing 101 fact is that real estate activity lowers dramatically during the holidays so I don’t want to get caught with an empty house come November.

So right now I am using all my contacts, networks, education and resources to find a great deal.

As you probably are aware foreclosures are at an all-time high and they are still going up . Real estate investing 101 rule is to search for opportunities to buy at a discount and there has never been a better opportunity to do that.

However, during the last three weeks I have looked at about twenty properties and have tried making offers on nine of them. Yet I haven’t even gotten back a single counteroffer because I keep on getting beat by people offering substantially more than I am on these foreclosed homes.

Why then am I having such a tough time finding a great deal in this market?

Some of the factors I think are at play are:

• The word is out that there are great deals out there. We have gotten past the fear stage and people are realizing that this is a great time to buy at a reduced price.
• On that same line of thinking people think that anything with the word “foreclosure” on it is a great deal and they are making offers at full bank asking price.
• There is more credit available now than there was 3 months ago. Is not as available as it was a year or two ago but it’s definitely better than the earlier part of this year.
• It’s summer time and people looking for a house to live in (different from me) need to find something before school gets started soon.
• There are some serious government incentives to buy foreclosures. These are mostly for owner-occupants and first-time homebuyers so there are a lot of people wanting to get in on this.
• Banks are more willing to deal. When 6 months ago they were not willing to sell a house for much less than what it had been foreclosed for, now they realize that their foreclosed inventory is increasing AND the government might not bail them out. So they are willing to sell these houses at a 20-30% discount from market value pretty easily. But, I am looking for a 50-60% discount.

Real Estate Investing 101- It’s a numbers game…

In real estate you got to look at a lot of ugly ducklings before you find the swan. From different sources I have learned from I’ve heard things like “you got to look at 100 houses before you find a good deal…” or “you have to make a lot of offers”. I just always thought that was all approximations

In the meantime I got to keep looking and making offers. These are some of the things I am doing or will be implementing in the coming weeks:

• All my searches start online. Because I have a full-time job that I still need to keep, looking online is very efficient and allows me to narrow down my selection. Since I am looking for properties in specific areas this allows me to target my search to specific cities or zip codes. I use the MLS, Vestlet, county tax records, Zillow, HUD and others for this.
• I have defined my criteria and have contacted several real estate agents to let them know what I am looking for and to notify me if they come across anything meeting that criteria.
• I will be contacting several wholesalers (people that specifically find investment properties) to also let them know of my criteria.
• I am making more offers. While before I was making one offer per week I will be scaling that up. I have made six offers in the last 4 days.
• I might broaden my search area a bit. My area of interest has turned out to be pretty competitive.

For previous real estate investing articles, click here.

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