How to Find and Benefit from Wholesale and Discounted Properties
A very popular question we often get asked is where do you find the great investment deals and how do you best take advantage of them? This is really two questions, so let’s start with the "where do you find the investment deals" and then we can look at the “how to take advantage of them”
Where To Find The Great Real Estate Investing Deals
I certainly do not want to disappoint you because I know you are probably sitting at the edge of your seat awaiting this answer and have run up on some frustration in finding "the deals". Truth be told, the best real estate investing deals, properties and opportunities come because of who you know.
If you have ever wondered if there is a “good ole boys network” (simply slang for a network of likeminded individuals who share a common interest and goal) when it comes to real estate investing, you are right, there is!
While it is not all "boys" anymore, the great deals tend to go to the people who have been in the business longest and made the most connections. These deals never even hit the "open market" for you to find because they get offered to people like me who have been investing and growing our connections for decades.
If you do not have this type of network built up then belonging to a buyers group such as The Equity Builders Real Estate Investment Buyers Group is paramount.
It takes many connections and networking to uncover the great deals. When enough people know about what it is you are looking for, eventually everyone’s objectives are found and shared with each other to create a win-win for all.
How To Take Advantage Of The Great Investment Deals
- Find the win-win. If I were to take all the lessons I have learned over the years it would be that (to benefit from any transaction or investment) it is best accomplished by creating a win-win situation.
- Create the economies of scale. For example all the turnkey companies that I work with buy in bulk, they buy a number of properties from one seller at a time and get a discount, they buy several kitchen sinks and front doors and shingles, etc. Being able to make bulk purchases saves money.
- Systems. Systems are probably the second biggest lesson I have learned over the years. When you are investing, find what works for you, write it down. Write down what you bought, where you found it, who did the work, etc. When you do a deal that worked well, simply document it and duplicate it. You never have to repeat a bad experience and you definitely want to repeat every win.
Two Great Investment Models (which one is your investment style)?
Turnkey properties. Purchasing ready-to-go turnkey properties is best suited for fully passive investors. These turnkey companies take on all the risk of unexpected repairs and, or title issues. Once you purchase from them you are purchasing a performing asset. A complete and profitable system.
These sellers are harder to find as they typically do not advertise, they use investor resources such as ours to promote their properties. What they do is buy properties using advantages of economies of scale pricing through buying in bulk purchases and rehabbing with their own crew using bulk purchase buying power.
They also do their own property management. Again using economies of scale to allow them to run a more efficient property management company. Then buyers groups like us create stronger buying power though our economies of scale purchases allowing for better pricing.
The Create Your Own Turnkey. This is suited more for someone who wants to be more of an active participant in their approach to investing. You can buy from wholesalers or not for profit organizations.
Again though, the hard part is finding the investment properties to purchase. This is where wholesalers and not for profit organizations come into play. They have access to lots of properties.
You can acquire properties from these sources one at a time or even in multiple purchases. These properties can be purchased for 15-35% below the BPO (a Brokers Price Opinion) will come in, based on its current condition. This 15-35% percent discount reflects your profit and, or safety margin. Any value benefit from the renovations will be an extra bonus.
These properties typically require renovations of some kind to turn them into a turnkey property that can be rented or flipped. When buying from not for profit organizations, often they will have their own rehab crews whom they can recommend that are experienced in these kinds of renovations and are typically cheaper than others.
As a real estate investor myself, I have spent years developing relationships with plenty of these Good Ole Boys Networks and I am happy to share these resources with my Real Estate Investing Group Members. It truly is an "all the little boats rise at once scenario". Because I have the group, I get access to the deals, because you are a member, you hear about them first.
A true win-win for us both!
If you have any questions about real estate investing or where to get started, give me a call today! Larry Arth, 941-718-7761