Let’s talk about building your real estate pipeline!
Finding real estate deals is no easy task. In competitive markets, there may be hundreds of bad deals for every good one. This can make good real estate deals very hard to find. But how do you find deals in the first place?
Here are a few strategies for building your real estate deal pipeline:
To check out BirdDogBot as a tool for automating your real estate deal pipeline, feel free to skip to the end of the article!
1. Calling Real Estate Agents
Real estate agents should have a firmer grasp on the local market. They might even have access to off market deals when someone is considering selling but hasn’t actually listed yet.
By getting in touch with multiple real estate agents, you can cast a wide net to make sure you are up to date with current listings that meet your criteria. They can also serve as guides in a particular area that you might be unfamiliar with. This is especially true for out of state investing.
However, not every agent will reach out to you first when they come across a good deal – they might share it with another client before you. This strategy is very easy, after all, so lots of investors in your area will probably be doing the same thing.
Regardless, it doesn’t hurt to start reaching out to real estate agents in the area that you want to invest in!
2. Contacting Wholesalers
This is very similar to contacting real estate agents.
A wholesaler is someone who gets a property under contract and then assigns the purchase contract to another buyer. The wholesaler then takes a fee from the person that gets the assigned contract.
Ideally, the wholesaler gets the property under contract at a steep discount. That way, the contract price plus the wholesaler’s fee are still low compared to other available deals. Wholesalers will often share their listings with real estate agents, so you might be able to learn about wholesale deals through them too.
That said, like real estate agents, wholesalers are often working with a number of investors. Someone can easily beat you to a deal or enter a sort of bidding war, making the deal worse than it might seem at first.
3. Driving for Dollars
Driving for dollars is just as it sounds: you drive around a neighborhood looking to see if any properties seem like they are ready to sell. It might be better characterized as “driving for motivated sellers.”
Here are some things to look for when driving for dollars:
- Tall grass or weeds in the yard
- Beat up roof or garage door
- Gutters hanging off the building
- Worn paint
- Lots of newspapers in the driveway
- Overflowing mailbox
- Notices posted on the front door
These are just a few of the things to look for when trying to find off market real estate deals. Your criteria might be different depending on the sort of property you want to specialize in, but these factors are general signs of distress. A property owner might be more willing to sell as a result.
When you find a property that seems like it would have a motivated seller, you will have to search the public record for the owner’s contact information or find some other way of reaching him or her. This can be much more easily said than done. And even if you do find good contact information, there is no guarantee that the owner would be willing to sell at all.
The more willing the owner is to sell, the more he or she will be willing to lower the asking price. Even if the owner does not lower it, you will still have first dibs on the property that may not ever be listed publicly. Depending on the deal and how hot the market is, this could give you a distinct advantage anyways.
But driving for dollars takes a lot of time and energy. You might not have the time to drive around for hours scouting properties. It can be very effective, but very inefficient.
4. Direct Mail
Sending out direct mail flyers or letters is another method to try and find motivated sellers.
This is where you send letters to property owners asking if they are willing to consider selling. You typically collect contact information and filter mailing lists by using public data, like mortgage, tax, and income status, among other factors. There are a number of services that help with filtering neighborhoods by these factors to save time, but they can be pricey.
Sending out direct mail is very, very expensive at scale. While the payout can be large with even just one solid deal, you’ll probably need a substantial investment up front. To cover an entire neighborhood via direct mail, it might take thousands of dollars. And there is never a guarantee that you will get results.
Direct mail takes persistence to work well. In learning which mailing strategies work best in your market, you may have to burn through a good chunk of money in fine tuning your campaigns. Some campaigns might land you dozens of deals, while others will bring nothing.
Like driving for dollars, direct mail can be very effective but also very inefficient, at least until you get to a much larger scale and figure out what works best for you.
5. Looking Through Listings Every Day
This is probably the easiest way to get a firm grasp on your market. You just look at properties as they come onto the market by manually sifting through them.
Free platforms like Zillow, Redfin, Trulia, and others make this fairly easy. That said, this can be a lot to look through, and can take a long time. At the same time, each platform’s filters might not be what you need to fine tune the listings down to only those that you would actually consider.
Alternatively, you can have your real estate agent set up a filter to send you listings from the MLS as their statuses change. Then, every time you get an update from your agent, you can look through all of the changes in your market that you asked for.
Especially early on, looking at lots of listings is useful for getting a firm grasp on your market. But it can get old very quickly once you do understand where prices are and what things can rent for. This is where automation can really help.
6. Use a Robot to Find Deals for You
While the other strategies do work, they take a lot of time and can be very inefficient. Thankfully, automating the process is possible!
BirdDogBot is a useful tool for syndicating listings from all over the place, including Zillow, Redfin, and even Craigslist, into one place. You can set up an automatic filter that alerts you whenever a listing on just about any public platform meets your exact criteria.
Check out their site to see how it works in greater detail!
BirdDogBot has built in tools to run the numbers on properties as well, so even after it finds properties within your criteria, it can automate the analysis step of the property, too! Of course, you can always run the numbers on the property yourself by using my free rental property analysis spreadsheet instead!
Using a tool to automate the process can ensure that you have time to work on other parts of your real estate business. Searching for deals does not have to be super inefficient and slow. By being able to focus on only properties that meet your criteria, you will become a more competitive investor in any market. Being slower than someone else can easily cost you the deal.
Once you know what you are looking for in a real estate investment, consider using BirdDogBot as a tool to speed up your property search by automating the process.
There is no one way to find good real estate deals. The best investors will often use multiple methods to cast an especially wide net and make sure that nothing slips through the cracks. Either way, the deals are never going to completely find themselves. You will have to set up your own systems for finding deals if you are to launch a successful real estate investment career.
This article includes affiliate links.