Those of us competing for real estate deals realize it is currently a seller’s market. With property inventory levels getting low, even in places in the Midwest, the competition lately seems even higher than we’re normally used to.
Investors are traditionally a competitive bunch by nature. The ability to outmaneuver competitors while picking up profit bearing properties is a key trait savvy investors possess.
Our head coach at Strategic Real Estate Coach, Kyle Garifo, recently was able to sit down with Sean Katona of Simplified Properties. Simplified Properties is a commercial and residential redevelopment company. They buy aging and underperforming properties – transform them, and create move-in ready dream homes, apartments and retail centers in southern California and Washington state – two of the most competitive markets out there!
To listen to the full podcast of Kyle and Sean discussing competitive markets and more, tune in here.
How to Find & Fund Deals in Competitive Markets
There are many theories out there about why the markets are becoming so competitive. In an article from Inman, they suggest perhaps there has been a change in social behavior as we move into more stable economic times – maybe people just aren’t up for moving as much. Or maybe there is a hidden financial dynamic (one we can sense, but haven’t yet put our finger on) that argues against the old “prosper and move up” patterns of not so long ago.
RealtorMag.org proposes that there are essentially two major consequences of a persistent housing shortage: a continuing steep rise in housing costs and people needing to double or triple up to afford a home. Young adults may have to find multiple roommates or else live with their parents.
Just remember to keep in mind, real estate investing is a relationship business.
These strategies are how we’re currently able to keep finding killer deals. They may seem like simple, straight-forward tactics, but if you’re doing all of these at once, being persistent and making tons of offers, you will be able to stay on top of your market.
- MLS – This is probably the most common ways to look for deals in your market. Real estate agents can manually pull lists of properties for you on a daily basis, multiple times a day. Then are able to manually e-mail you properties that fit your criteria.
- Realtors – Working with a realtor (or multiple) in your market is incredibly important in helping you find deals before your competition. Your realtor should know the exact criteria of the types of properties you are looking for so they can be on the lookout. They can also send you MLS listings that fit your criteria daily by setting up an MLS drip for you.
- Bird dogs – A bird dog is someone who spends their time trying to locate properties with substantial investment potential. Usually, the intent is to find properties that are distressed and selling at a discount that can be repaired or remodeled and sold for a sizable profit.
- Direct Marketing – This can be any of the following:
- outdoor ads
- direct mail
- online marketing
- Facebook ads
Don’t feel discouraged if your marketing campaign isn’t performing the way you expected or want it, just tweak it and remember what worked or didn’t work in the future. Something that worked 6 months ago might not work right now and something that works right now may not be the way to go in a year.
The idea is to have a lot of lines in the water at all times – it’s important to not get hung up on just ONE acquisition strategy. You always need to have multiple possible deals coming in so you can cherry pick the best ones that fit into your business type and that will make you the most profit.
Ways to Market if Your Low on Cash
Many times, when you hear “direct marketing campaign” you’re thinking you have to spend big bucks. It’s definitely possible to do spend a lot of money marketing, BUT there are also a few ways, especially if you are just starting out, to market on the cheap.
- Knock door to door on pre-foreclosure
- Leave sticky notes on doors
- Use free Craigslist ads
- Post card campaign at .40/card
- Bandit signs during the weekend
You will spend more time on the phone and knocking on doors until you are able to trade dollars for time. Before you have the capital to spend, you’ll have to be on the grind daily in order to work for those pay days.
DON’T quit after one or two marketing attempts. Monitor and track your metrics to see what’s effective. Sometimes it’s just a simple change of a picture or the color of the postcard that will help you gain more leads.
You really have to hit the right person, with the right message, at the right time. One month your letter might not connect, but two months later, your message might hit someone exactly when they need it.
What Other Resources Are Out There?
One list we often use is the Probate/Inherited Property List – this is usually made up of lots of older homes with older owners that might be looking to liquidate their real estate quickly. It saves the seller the time of having to work with a realtor, do repairs and schedule open houses, because with you, they can just unload their home and go.
You can also knock on doors of pre-foreclosures. The homeowners have a deadline that’s coming up with a lot of equity at risk if they don’t take action, so there’s always high potential there.
Also, keep this in mind when you are trying to find new potential deals – can you find someone who has a problem and can you help them solve that problem or add tremendous value? If you are doing that AND working with the right people, then you can get some profitable deals.
If you’re able to help someone AND make money, what could be better than that?
The Proven Flip System
If you want more suggestions and education on how to keep the profit checks rolling in, check out our Flip System. This is the same system that allows me to flip 2-4 big profit deals every month, without EVER using a dime of my own cash or credit.
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