Making Money At The Buy
Brian is debt-free and interested in getting into real estate. He'd like to buy a small investment property. What's the best way to go about finding a deal in order to make money on it?
QUESTION: Brian in Orlando is debt-free and interested in getting into real estate. He’d like to buy a small investment property. What’s the best way to go about finding a deal in order to make money on it?
ANSWER: I would try several fronts to scratch up a deal. The deals are on the MLS. Sometimes, it’s not as hard to find them as it is to find a real estate agent who thinks on a wholesale basis rather than a retail basis. It’s not that they’re contrary or greedy. Their minds just don’t work that way. When you start talking about buying a $200,000 property for $140,000, they look at you cross-eyed like your parents are cousins or something. It’s just hard for them to digest that. There are some real estate agents who work distress deals. If you poke around, you may find one or two of those, and they may actually be of help to you. So yes, I would try to poke around on the MLS with a real estate agent, and that’s one thing to do.
Another thing to do is just look for properties that are physically distressed. The gutter’s hanging down, the yard hasn’t been cut, and then you could start poking around and finding out what the status of that property is. Is it a foreclosure? Is it in bankruptcy? Is it in an estate? Can you find stuff that way?
I also used to buy from estates quite a bit. It takes a little bit more time to dig through those, but wills are recorded at the courthouse. It’s public record when someone passes away. It’s called probate court. Probate court is public record where the wills are filed in most states. A lot of people die who don’t own real estate, so it’s kind of a needle in a haystack thing. You can poke around on those.
Certainly foreclosure listings, but you’ve got to find ones that have equity. A lot of people owe more on their houses than they’re worth, and in most cases on a foreclosure, that’s a waste of time. Sometimes you can find the real estate owned department of a bank that has property they’ve taken back that they’d like to sell. Some of that is deals. Some of the banks are crazier than some other sellers. It’s just a process to keep poking and digging around. Always remember in real estate that you make all your money when you buy. The price is everything. That leads you to the second principle of making money in real estate, and that is patience. Thousands of hours of patience to get the right deal, and walk away from bunches of them until you get the right deal. Don’t get in a hurry to be an owner.