There are a lot of different ways to find good deals as a house hacker, buyer, or real estate investor. As a realtor and house hacker, I have learned first-hand the different ways to find the right property that fits your real estate needs. There are common techniques that are used to find deals by realtors and investors and over the past 12 months, I have experienced the pros and cons of each. The first one is the most obvious which is leveraging the Multiple Listing Services (MLS) to find a property. The MLS is used by agents, investors, buyers, and sellers through websites like Zillow, Realtor, Redfin, or my personalized search website; mckinseyalston.exprealty.com.
- Pros: Easy to search and set up instant alerts
- Cons: Deals don’t last long
The second technique is driving for dollars which means you are driving around a specific neighborhood looking for potential properties that fit your criteria. Once you find a property of interest, you can use the address to search for the owner on the county website. This allows you to reach out directly to the owner and see if the owner is willing to sell. As a realtor, I have driven for dollars and reached out to owners with no success, but I believe that there is potential for this method to work as a house hacker. Based on feedback from other investors, there is a lower success rate using this method but all it takes is one YES.
Driving for Dollars- Things to look for:
- Uncut Grass
- Chipped Paint on the Home
- Deferred Maintenance
- Unmaintained Garden
- Broken Fencing
- Pros: Great way to locate off market deals
- Cons: Time-consuming
The third technique is direct mailing which is used in the real estate industry by realtors and wholesalers (We’ll talk about wholesalers next). Direct mailing is when you send letters to owners in a specific area looking for an owner that will sell their property. Recently, I ran a campaign for a buyer client which led to a seller listing and placement of my buyer, so I know this strategy works. Next month, my wife and I will leverage direct mailing to find our next house hacking property with the goal of finding a property by winter.
- Pros: Customize your outreach plan with targeted demographic
- Cons: Time-consuming and upfront cost
The final and fourth most common technique when looking for a good deal is using a wholesaler. Wholesalers use direct mailing and other techniques to obtain the ability to sell an owner’s property without listing it on the MLS. The wholesaler will market the property to a group of investors and agents via email lists or Facebook groups. Wholesalers are working with owners looking for cash deals and, in my experience, mortgages are not used. When dealing with cash deals, you will need to use hard money (loan taken for full purchase from private lenders like investors, family, friends, private money lenders) and a system to quickly identify deals that make sense. Again, you must act fast as good deals will not last long.
- Pros: Great way to find deals without using your time and resources
- Cons: Usually all-cash deals
A bonus way to find a great deal that does not always get talked about is through friends and family. By sharing with your circle that you are looking for a certain type of property, you increase the potential of finding a great deal. You never know where your next deal will come from so never count out any of the above methods.