When I'm looking at a new property to buy for real estate investing, I'm typically looking at it for the first time from my computer, whether it's photos someone sent me or it's a listed on a site. I want to do as much due diligence on the it as I can before actually going there because we all know the most valuable thing we have is TIME.
We don't want to spend a lot of time out in the field going to every single property to scope it out. You should be able to do the research you need right from your computer.
These are the 6 steps I follow whenever I'm looking for a new property and want to make sure I am maximizing my time.
6 Step Process to Find and Locate Deals
Step 1: Get with a real estate agent to set up MLS Drip with your search criteria
If you are a serious real estate investor and you are NOT set up on an MLS Drip with your real estate agent, I have to ask WHY NOT? You should be looking at properties on the MLS even if you aren't putting offers on them to see what's going on in your market. You want to see how things are priced and what your comps are.
Step 2: Review the property
Check the property out. Some major disqualifiers are:
- Low ceilings
- Bad floors
- Foundation problems
- Built facing an odd direction
- Homeowner additions or changes
Step 3: Look at recent comps within the last 6 months
Look at properties that are similar to the one you are looking at - around the same number of beds and baths.
When we are looking at comps, we use Realtor.com for a lot of reasons, one being their "Just Sold" button, which will show you the houses that just sold in the area you are looking in. You can compare the number of beds, baths, square feet and see what the property sold for and when.
Step 4: Pricing history
Price history isn't SUPER important, but it's one of the factors we look at when evaluating properties. You can use any site like Realtor.com, Zillow or Trulia to see the transfer history. They are pulling that data right from the County Auditor's website.
Step 5: Go see the property
Once you have done all the due diligence that you can without actually visiting the property, it's time to go out and see it in person.
- Review what you are looking for
- Review what renovations the property needs
When you make an offer blindly on a property and you and the seller sign the contract, if you never put up your earnest money, you are technically not under contract. Until the earnest money has been deposited in escrow with the listing agent, title company or closing attorney, you are not "Under Contract" yet.
Recently, I made an offer on a property that was accepted, so then I made time to go out and visit the property and see it in person and it was not what we thought it was. Since I did not put in my earnest money, I just unwound the contract.
Many times, your agent will want you to put your earnest money down ASAP, but, that will put you at risk. Give yourself time to make sure it's a true deal and don't put the earnest money down until you absolutely have to.
Step 6: Run the Automated Offer Formula
In order to calculate your Maximum Offer Price, use our Automated Offer Formula.
I paid $195,000 for Whittlesay Drive.
Let me help you
I didn't go from being a financial planner to successful real estate investor and coach overnight, it took a lot of trial and error and time. Now, I've bought and sold over 700+ properties and I have my system down to a science.
I love sharing my success and teaching others exactly what I did to make my business run like a well-oiled machine.