I was working with one of my private clients recently and she told me how frustrated she was after spending so much time following some bad advice she found in various real estate investment programs on how to find great deals.
Unfortunately, she was not the first to get caught in this trap. Similar stories have been told to me by several of my clients, and to be perfectly frank, I even wasted 2 years following these ideas only to end up with absolutely nothing to show for it.
So DON’T waste your time following these “free” techniques to find great deals:
Work with real estate agents: Now before you get mad at me and think I’m putting real estate agents down. In fact, I trust them in my business … but not to find bargains.
What’s irritating is the number of programs that tell you to contact real estate agents to find deals. They will tell you that real estate agents can search the MLS and extract all the listings with keywords like: pre-foreclosure; handyman special; TLC; motivated seller.
It is true that real estate agents will find dozens and dozens of these properties. And it won’t cost you anything. And that? What you will soon discover after a lot of work is that none of these owners are willing to sell at the price we need to buy.
Before long, real estate agents will realize that you will never pay anywhere near the list price and will fire you as a customer telling you that the prices you want to pay do not exist.
And they are right.
There are no purchase prices of 50% -60% of the market … in the MLS.
Why?
Because truly motivated sellers … those who will sell at that discount … don’t list their home with a Realtor for these reasons:
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They don’t think they have time to wait to find a buyer.
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They don’t think they can pay the commissions.
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They don’t have the money for the repairs necessary to list a house.
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They don’t want strangers walking around their house seeing the chaos their life has become.
So for some or all of these reasons, they don’t list their home with a real estate agent. Therefore, real estate agents are a huge waste of time when it comes to finding these deals. The offers are simply not listed on the MLS.
FSBO: The next technique the programs tell you is to work on all FSBO (For Sale By Owner) ads. Once again, you are working in the wrong market. What you will quickly discover is that FSBOs are trying to squeeze every last penny out of the sale by saving the real estate agent commission. These owners will not sell at a huge discount.
Truly motivated salespeople don’t try to sell FSBO. They already have too much stress in their lives. Figuring out how to sell a house, draw up contracts, and close it is just too much added stress.
Another popular technique that is often taught is working empty houses. Except … well, by definition, no one is there. By the time you do your research and find the owner, it may have been weeks and you find that the owner is not only not a motivated seller, but does not want to sell at all. They have plans for the house.
I have seen more real estate investors burn out with these techniques than I have ever seen succeed. Personally, I was almost a victim of this flawed training.
It is not that you will never find a single offer using these techniques. It’s that they are so few and far between that it makes it difficult to identify a deal, much less turn it into a business.
If you want to create a steady stream of profitable deals in your business, the only way is to market your business. This is why when I start working with a new client, one of the first things we do is develop a marketing campaign. You should develop a 6-month marketing plan that includes lists and specific areas using various marketing means.
With good solid marketing, there will be motivated salespeople who will call you; And you can create deals right from your desktop and stop driving around town looking at a bunch of houses you’ll never buy.
Don’t get caught up in wasting your precious time.
Expect abundance,
Lou castle