Minggu, 03 Januari 2010

Deal-Finding Strategies: The Good and The Bad

Good: The Multiple Listing Service. The MLS is essentially a catalog of all the properties listed for sale by brokers. The trick is to ferret out which properties have motivated sellers without making offers on all of them. I’ve honed this skill through years of translating agent lingo like, “Handyman’s special” (looks bad, smells bad, has at least one major system that doesn’t function).Coincidentally, these are the same properties that most agents prefer not to spend a lot of time with.
Bad: Direct mail to real estate agents. In 1994, I had the brilliant idea that I might be able to find MLS-listed properties even faster if I simply let agents know what I was looking for. So I purchased 1,200 agent names from the Board of Realtors and generated a 3-part mailing send to every agent in town.
The theme of this campaign was this: if you, Ms. Agent, have a property listed that fits my criteria, I’ll make an offer and you get to keep the entire commission. Out rolled my brilliant campaign -all mailed first class, incidentally – and in came the phone calls.
first, I’ll target only the 200 or so agents who list the types of properties I buy.
Good: Ads in the Yellow Pages. For 8 years, I’ve had an ad in the “real estate” section of the Yellow Pages. The sellers tend to be motivated, cooperative, and have unlisted properties.
Bad: Advertised FSBOs. Properties For Sale By Owner, a.k.a. FSBOs, are a favorite for some real estate investors. I, on the other hand, have never purchased a property from an owner who advertised his property for sale rather than calling me.
I’ve found several problems with trying to buy FSBOs. If you are buying expensive homes creatively, these sellers are ripe for the kind of solution you offer.
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