There is one really interesting question that we get all the time…”how can I find real estate properties to buy?” I thought I would share this in today’s post. The question reminds me of a course I took called The Referral Institute. The course taught an interesting element that very much pertains to this question.
In a nutshell, it confirms the fact that in order to expect a great reply to any question you must ask a specific question. General questions will never result in a reply that has any substance or helpful insights. Questions which are asked in a more specific nature will prompt someone to really search the human rolodex (their mind) for the correct answer. The general question “How can I find real estate properties” is so broad that it usually gets an answer like, “I don’t know perhaps you can look online, I am sure you will find something there”.
O.K. enough with the deep philosophical stuff!
Let’s break the broad question down to specific questions and we can answer each of them.
Where can I find good cash flowing property?
A cash flow property can be manufactured (meaning you buy a property, place a tenant in it and turn it into a cash flowing property) or you may purchase one that is already a cash flow property. Where to find these will be within different sources. Properties which are already cash flowing indeed offer you the most sustainable investment as the guess work has been removed as you are now buying a performing asset.
The most common way to find great cash flow properties:
Performing cash flow properties are typically non-listed properties and cannot be found thru your conventional advertising outlets or through a typical real estate agent. These performing asset properties are typically offered through exclusive buyers groups such as Equity Builders Group.
The reason for this is that these sellers prefer to sell to educated investors. Often real estate investors are new to the field of investing and tend to do a lot to tire kicking (asking a lot of questions and shopping the markets) which takes a lot of the seller’s time.
It is for this reason they prefer to offer property exclusively through buyers groups as they know they are now dealing with more educated investors, because the buyers group provides all this up front knowledge to the prospective buyer. This allows the sellers to do what they do best, find distressed properties, rehab them, and place tenants in them, selling them as a performing asset and then repeating.
Manufactured cash flow properties can be found though a couple of channels:
Your Realtor (local real estate agents):
While the opportunities are limited, a local realtor may be able to help you find a property that you can buy, place a tenant and create cash flow. I have personally done this myself and also helped investors as a realtor to do so.
The challenge with this is that the MLS (multiple listing system) that is used by the realtor professionals are designed for the retail buyer and seller. This makes it much harder to find any properties with a price point that is conducive to buying and renting for a profit suitable for an investment. It is imperative to buy a property that can provide a good cash flow. While working with a realtor is the first attempt by many, it becomes frustrating very quickly as the deals are few and far between because you are shopping in the retail area.
Buying a property from a wholesaler is for the active investors who want to purchase property at a good price and have the time to devote toward the art of the deal.
Wholesalers are people whose business is finding highly motivated sellers as well as motivated buyers. They create buyers lists of people (often investors) looking for property at a good price. Then they (through extensive post card and direct mail marketing) find highly motivated sellers who have little to no mortgage on their property. Then they simply sell you the properties that they find and add a finder’s fee to the cost of the property.
These properties are typically tired out and in need of repair. Instead of fixing the properties they are more motivated to simply sell the property cheap and move on.
The person who takes the time to renovate the property can usually create a nice win by buying low, fixing up and increasing the value enough to make a substantial profit. They can then sell or place a tenant and keep for long term investing. If this type if investing is for you, you will want to get added to as many wholesalers mailing lists as you can get on.
If you search wholesalers in your perspective areas you should be able to find them. You can also visit the local (real estate investment association) groups. Simply google the name of your city and then REIA. Example Tampa REIA. At these groups you will find many wholesalers.
Investment Buyers Groups:
The last, and possibly the best, way to find these kinds of properties is through a formal real estate investment buyers group like the Equity Builders Buyers Group. We have access to properties that are currently cash flowing. These are in emerging and stable markets that will allow for solid cash flowing investments over time.
Check out our free registration today!