Investing in real estate is a great way to round out your retirement portfolio. It offers you a wide range of versatility and allows you to address your interests. There are many different types of real estate investment properties to consider, including:
- Commercial real estate.
- Fix and flip real estate.
- Rental properties.
- Multi-family housing properties (large and small).
- Vacation rental properties or Air BNB properties.
- Land (mining, farming, and residential or commercial development).
If you’re just getting started with real estate investments, your first mission is to choose the type of real estate investment that works best for you or that you wish to pursue. Once you do that, the goal is to cultivate real estate leads to that end. It may take a little time, research, and trial and error to find your perfect fit, but it’s always best to narrow your focus in the beginning and then broaden your horizons and shift your focus as the opportunity presents itself.
Below you will find a few tactics and techniques you can use to discover potential real estate investment properties in your area. Use them wisely!
Networking with Real Estate Investors in Your Area
If you have local meet-up groups for real estate investors, it’s time to step out of the internet lurker shadows and dive right into a group that meets face-to-face to discuss real estate investment opportunities. Not only can you make connections that become lifelong friends, but also connections that will become your lifeline to investment properties.
Many of these meetings have planned discussions or “talks” about specific issues that are common problems for real estate investors and allow you to get to know other investors who share your investment interests and can help you get started on your journey.
Many experienced investors have multiple projects going at any time and are looking for a joint venture partner, with whom they can delegate some of the responsibilities while sharing the risks. This offers you an opportunity to get a feel for various properties and essentially earn while you learn the business.
Check out local listings online to discover potential groups of real estate investors and meet-up opportunities in and around your area. You might even be able to find meet-up opportunities by visiting your local library or reading bulletins posted at your favorite supermarket. There’s nothing quite like getting to know others to help you find new properties to conquer.
For Sale By Owner (FSBO) Listings
For-sale-by-owner properties are growing in popularity as people decide to cut out real estate professionals and the commissions they require for selling properties. These opportunities often allow you to get in on lower priced offers (because sellers aren’t marking properties up to account for said commissions). It also means you have a little more room to negotiate with sellers on a personal level.
Here’s the rub with FSBO listings. Some investors consider them better for more seasoned investors who have a few successful investments (of whatever type of property you’re investing in) under their belts. Novice investors can learn from watching realtors in action about the steps involved in making a purchase, inspections, closings, etc.
However, that doesn’t mean that novice investors cannot enjoy successful “buys” when going the FSBO route. In fact, you may be able to find many affordable investment property opportunities by doing this.
Develop Relationships with Multiple Real Estate Agents
Doing this puts the real estate agents to work for you. Prove to them that you are serious about real estate investing and they will eventually start bringing you nice juicy property offerings before they hit the local MLS feeds. That means you’ll get the first bite on these properties.
The more real estate agents you have working on your behalf, the steadier the supply of fresh leads that come your way. The goal is to be the first call your realtors make when hot new properties that meet your specific investment criteria come across their desks. While some real estate agents balk at the idea of selling properties to people seeking rock-bottom prices (their commissions are usually a percentage of the property’s selling price, after all), there are some who are forward-thinking enough to think long-term.
The other beauty of working with real estate agents is that they end up doing some of the work for you when it comes to pulling information about comparable properties in the area to help “guesstimate” the value of the property you’re considering by comparison.
Join Real Estate Investment Clubs and Organizations
The internet is filled with various groups and organizations that are dedicated to real estate investments. Many of these offer joint venture opportunities. Some of them will even offer hot property listings available to members based on their lead generation efforts that include:
- Phone call generated leads.
- Internet-generated leads.
- Form-generated leads.
- Bankruptcy generated leads.
- Foreclosure property listings.
The sky is the limit depending on the type of real estate investment club you join and the types of properties the organization specializes in.
The thing to remember about real estate investment clubs, though, is that many of them do charge fees for the services they provide. This is a business where it certainly takes money to make money. Understanding that time is money, though, many real estate investors find it completely worth their whiles to invest in joining these clubs in order to save them time on the other end of the investment.
The real beauty of these clubs isn’t solely in the real estate property leads they provide. It is in the other information they make available to their members, such as:
- Lead generating tactics and strategies.
- Lead development guides (how to take a cold lead to one that is smoking hot and ready to sell).
- Relationship building techniques to help investors relate better to potential sellers.
- Guides on how to take your investment property from purchase to sell or rent in less time.
- Maximizing return on investment.
- Funding options to help you make your first investments.
The sky is the limit. If there is an issue investors stumble over, most real estate investment clubs and organizations will offer education to help you learn from the mistakes and misfortunes of others. This helps you transition from a novice investor to a seasoned pro much faster.
Direct Mailing Campaigns
While direct mail campaigns better serve seasoned real estate investors who have the resources to leap on hot leads as they arrive, they are usually highly successful efforts that provide you with an excellent return on your investment. You get lists from various organizations and you follow up on them by sending mail directly to the property owners.
The most successful lists involve properties in distress (those approaching foreclosure, for instance) who are highly motivated to sell their properties quickly to save their credit the enormous hit foreclosure delivers.
Other lists may include properties owned by people who have recently died or claimed bankruptcy. You can contact heirs to see if they may be interested in selling the property, via mail.
That doesn’t mean you can’t generate your first solid leads through an effective direct mail campaign. You just need to be ready to go with your funding and your strategy for what to do with the property once you make the purchase.
Attend Property Auctions
Property auctions occur for various reasons. Some people get behind on their taxes and the government seizes the property. Others are conducted by banks who have foreclosed on properties. Still, others are performed by estate companies that help families liquidate property after divorce, death, etc. Sometimes, you can get real bargains at these auctions. At other times, not so much.
Many auctions, especially lien or tax auctions, are conducted with only limited, if any, access to the home. That means you cannot conduct inspections of the property before bidding, which could leave you in a world of hurt if you pay more than the property is worth based on its actual condition and state of disrepair.
There are certain things to note about property auctions before you decide to bid, such as:
- Comparable property values in the surrounding area.
- Condition of the property (if available). The ability to conduct a thorough inspection is best.
- Auction reserves. This is the rock-bottom price below which the house will sell. Some auctions make the reserve price public. Others do not.
- If there are additional lienholders for the property you must also pay before taking possession of the home.
- If there are people living in the property and whose responsibility it will be (as well as legal options) to remove them.
Property auctions can be highly beneficial especially if you have a construction background under your belt to help you identify potential problems with the property, so you know how much to bid on it.
Believe it or not, the online marketplace presented by Craigslist can be a huge boon to your efforts to invest in real estate. Not only can you make your presence felt by placing ads seeking properties, but also for finding sellers eager to part ways with their real estate.
By now you’ve probably seen the “We Buy Ugly Houses” ads online, on yard signs, and even on billboards. Craigslist is an excellent place to place them online and let people know exactly what types of properties you’re in the market for. Whether you’re looking for ugly homes you can fix and flip or turn-key rental properties, you can make your wishes known and let potential sellers come to you.
When it comes to seeking sellers, there are tons of property listings in large and small cities across the country. Perusing them daily, multiple times during the day, allows you to identify new listings as they appear so you can get ahead of the competition.
Once you have properties to sell, after you’ve fixed them or to rent, Craigslist can be equally beneficial in helping you get the word out about these properties, allowing you to sell or rent them quickly. After all, time is money. In this business more than many others.
Drive Around Town
It may sound overly simplistic, but sometimes the best opportunities arise quite by accident. Drive around your town. Get to know the different neighborhoods and use the opportunity to look for appropriate homes, businesses, buildings, and land in these areas. What’s a cornfield today, for instance, could become a strip mall tomorrow. Especially if you’re among the first people to notice and act on the “for sale” sign.
This type of groundwork does take time, but it allows you to get out of the office, learn the layout of your community, and visualize the property as it is and how it could be in living color. There’s nothing quite like driving around and enjoying the thrill of discovery as a real estate investor. It gets your blood going in a way that seeing a property online may prove difficult to do.
These are just a few great ways you can begin the process of developing leads for quality real estate investment properties. It might be best to focus on one or two methods until you have several successful investment property transactions under your belt before expanding your horizons. Who knows? Perhaps someday the leads will begin coming to you rather than you going out and chasing them on your own.