How to Find a Rental Property for Your Real Estate Investing Business

Learning how to find a rental property for your real estate investing business is much easier than you might think. Especially with all the great technology and websites that help you how to find a rental property so much easier.

There are many great ways to find good deals to build your rental property business. You can quit your job by finding good properties that bring in monthly cash flow to replace your income.

Watch how Dustin uses www.Zillow.com to find properties to buy.

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How to Find Rental Properties Real Estate Deals

Real Estate Agents

If you talk to a realtor and buy a property through them, you might not get the best deal. When I talk about deals, I mean a lower, discounted price than market value.

For example, if the market value of a home is $150,000 and you get it for $120,000, you just made $30,000 in equity on day one.

The quickest and easiest way to find properties is to call a real estate agent. All you need to do is call them up and tell them you want to buy a house and they will ask you for the criteria like number of bedrooms and square feet.

However, most real estate agents do not understand investment properties. They don’t understand how to make cash flow from a property and then use that cash flow to buy more properties.

They may understand how to buy and sell real estate, but they don’t all understand the real estate investing business.

Real estate agents are great!

They work when you are sleeping and they work when you are on vacation. Mine are currently working to find me properties where I am trying to invest and, when they do find one, they send it over to me.

 

PRO TIP: Look For Investor Agents

Look for real estate agents who are investor real estate agents. They don’t necessarily need to be an investor themselves, but they need to understand properties.

 

Investor Real Estate Agents

To find an investor real estate agent, call up any big real estate company and tell them you are an investor. Also, tell them you are looking for single-family homes with three bedrooms and two bathrooms, and you are looking to spend $100,000 to $120,000.

Then ask them who you should talk to about investment properties and your criteria. Usually, it will take a little bit, buy you will find the right person if you keep asking those questions.

The realtor needs to know the going rent and the type of clientele in the area you are searching. If you are not getting the answers, you need to move on to another company.

Finding a realtor is easy to do, but finding a realtor who helps out investors like us is a little harder.

You don’t care about the drapes or the carpet, you just want to make sure you can buy a property that is cheaper than normal and can appeal to a wide array of people.

You need a realtor who doesn’t look at you like a home owner.

A home is inventory, not a personal purchase, because you won’t be living there.

 

PRO TIP: No to Exclusives

Some real estate agents will try to lock you into an exclusive deal with them. This means you would be on their list of buyers and they would send you deals only if you sign an exclusive deal.

If you buy any property in their area and you don’t use them, you will need to pay them a commission, even though they didn’t do a thing! I personally laugh at them and move on.

I work with realtors that want to work with me and find me properties. If this is the case, either move on or negotiate it to not be an exclusive deal.

 

Multiple Listing Service (MLS)

The MLS is where every realtor puts houses for lease, rent, or sale around the entire nation. Realtors have quick access to the MLS for viewing or for selling.

This is great for finding properties that sellers are putting on the market. They can post the size of the house, price, pictures, and details of the property. This is a way to find properties that people are listing for sale.

This is not the best way to find lower priced deals, but you can offer less. If they take the deal, great! If not, move on.

You already have a no if you don’t make an offer.

If a house is listed for $100,000 and I want to buy it for $70,000, I will offer $60,000. This way I can negotiate my way up. Always negotiate every single real estate transaction including price, terms, concessions, fix ups, etc.

Start low, because it gives you room to incrementally go up so your final offer is $70,000.

Getting this big of a discount is not normal on the MLS, because people have already made a decision to sell their property and they have a realtor who is guiding them. It is much better to find deals off the MLS.

 

Online Real Estate Database Companies

Online real estate companies are those that have great databases full of properties that are on the MLS and other properties that are listed by individual sellers.

These sites also scour the county recorder’s and assessor’s offices for anything that has happened with real estate.

The county recorder’s office records any deeds of sale, any trust, and any transaction with real estate.

The assessor’s office collect all of the owner information of the property, including the mailing address of the owner if the owner is renting their property.

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These companies include zillow.com, and they show properties all over the country along with the estimated value.

If someone is selling their house for $100,000, you can find out what Zillow deems as their “Zestimate”.

Zillow takes comparable sales in the area and assign a value. Zillow may say the Zestimate should be around $85,000.

The market value of the home is not necessarily accurate. I’ve found the Zestimate is approximately five to ten percent, give or take, up or down. They tend to be more on the high end.

If you see a home Zestimate at $80,000, it is probably anywhere between $75,000 to $85,000.

Make sure to talk to your realtor to find out how much a home is actually worth, but Zillow is a great site you can use.

Other great sites include redfin.com, trulia.com, and realtor.com. You can see the asking price, pictures, and details about the properties that interest you.

 

Online Classified Websites

Online classified websites, like craigslist.org, are great resources to use when looking for properties.

Craigslist is a fantastic way to find homes that are for sale by owner.

These sellers don’t want to pay all of the realtor fees and don’t want to put their house on the MLS. They are also probably not in a hurry to move.

If you think of the old classified ads in the newspaper, they are basically dead. Online classifieds are the best way to go.

I’ve found that Craigslist is the best place to use classified ads today.

To use Craigslist, narrow your search down to a specific area. This could be a city or a geographical area, depending on the size.

From there, you can type in “homes for sale” in a search or you can click on the link for real estate wanted or real estate for sale.

This is a great way to find properties that are off the market and you can hopefully find a really good deal.

On Craigslist, you can contact a seller directly. Sometimes a realtor will post a property for sale, but it is usually private sellers.

I’ve bought properties before through Craigslist from other investors.

I was looking online and the ad said the property was already rented, it made $800 a month, and they were asking $100,000.

I contacted them, negotiated a deal, and bought it from them without using a realtor. That saved both of us on fees and we went to a title company and they did the work.

PRO TIP: Run the Numbers

Keep running the numbers quickly in your head and weed out properties, because Craigslist and other classified sites doesn’t tell the value of the property.

When you are running your business, you need to know the value of homes in the area you are investing, and you find this through research.

Over time, you will be able to look at a property and know what a three bedroom, two bathroom house with a garage should should be priced.

Business Cards

You want everybody to know that you are an investor and that you invest in real estate, that you buy real estate, and that you rent out homes. The best way to do this is to make business cards.

Give these cards to EVERYBODY.

You never know where your next deal will come from. The card should say Real Estate Investor, your name, phone number, website, and even something like “I buy houses”.

As you are giving out these cards, people may put it in a drawer and six months later it may be time for them to sell and they come across your card — they may call you up.

Keep giving these cards out and, over time, you will find that more and more people will start contacting you. I have been doing real estate investing for more than 12 years.

I have people calling me all the time asking me about rentals or about buying their houses.

Direct Mail Marketing

Direct mail marketing takes more work than the other options. There are direct mail companies that will help you set up a campaign.

Websites like yellowletter.com specify in sending yellow letters.

If you’ve never heard of this, a yellow letter is a letter that looks handwritten on a yellow piece of paper with lines and a red line down the column on the side.

These companies will make your mailing look like a handwritten note that says I want to buy your house, cash, with no hassles.

These companies will show you how to do the best campaign for your money and they will market a certain area.

If you want to target all of the three bedroom, two bathroom homes in one zip code that don’t have a pool, they can help you do that.

They have a way to choose your criteria to narrow your search.

It is all about sheer numbers and economies of scale. If you send out 10 letters, you may not get any calls, but if you send out 100 letters you may get one, two or ten calls.

The more you send out, the more calls you will get, and the more chances you have at finding a property and a deal. This is a great way to quickly canvas the area and have someone else do the work.

Many people who use direct mail marketing flip houses. If they find a house to flip and then make $20,000 after they are done, that covers the expense of the direct mail campaign.

Driving Through the Area

Simply driving through the area, looking at homes, and talking to people, is a great way to find deals.

If there is an area near you where you want to begin investing, I highly recommend driving the area over and over again to see what is going on and what the homes look like.

If you see a home where the grass is overgrown, the shutters are falling off, and papers are piling up, you could go to the assessor’s office and find the owner’s address.

This could be the property address or a different address, but once you find it, mail them an actual yellow letter that says you are interested in buying their house and include your contact information.

They may be motivated to sell you the property.

Find Wholesalers

If you are like me, and you invest in other states, there are some areas that you have never visited.

I have only seen one property in person, because it was the first one I ever bought and I thought I needed to fly out to see it.

Every other house after that I haven’t seen. If you don’t have the ability to drive around the area and look at the property, use wholesalers.

A wholesaler is like a real estate agent, but they are not backed by a company and they don’t have the same resources. However, they do have motivation.

Wholesalers find homes for sale and they find investors like us to buy the homes. They then make sure there is enough equity in the deal.

Wholesaler Example How to Find a Rental Property

For example, a wholesaler may find a home for $150,000, but the market value is $180,000. The wholesaler gets it under contract, meaning they can buy the property themselves or sell the contract, and they lock it down for $150,000.

They then come to me and tell me they have a home with a value of $180,000 and if I fix it up it could sell for $200,000, and they will give me the contract for $5,000.

I then pay $155,000 for a house that is worth $180,000 with the potential of $200,000 with a little work. That’s a great deal!

I have bought many properties from wholesalers. I actually love wholesalers, because they work hard.

A lot of them don’t have regular jobs, because they are entrepreneurs and they go out and negotiate and make deals.

You just need to call them up and ask to be put on their buyer’s list.

Wholesalers are easy to find. If you are driving in your area, look for signs that say “I buy houses for cash” or something like that.

These signs are usually nailed to telephone poles or staked in the ground. These signs are everywhere, and those are for wholesalers.

Call them, tell them what you are looking for, and have them send you an email of their inventory. They will add you to their list, because they need buyers.

If you are not in the area, go to craigslist.org and find the homes for sale that look a little more like spam.

These are the ones that have asterisks, question marks, and dots. These are not normal listings that you or I would post. They make it look fancy to get your attention. Go through all of those listings to find a wholesaler.

 

Other Ways How to Find a Rental Property

Other ways to find investment properties include buying them on the Courthouse Steps, using legal notices from the newspaper, and using flyers, but these ways I listed above are the best I have found that work out well.

You can sleep while real estate agents, wholesalers, yellow letters, and business cards are doing the work for you.

What you want to do is set up a life so you can go on a six-week trip to wherever you want. Who does that?! I do, and I brought my entire family with me.

Start looking, start educating yourself on how to use these tools, and find deals to get your business going.

I now have it where other people come to me with deals.

For example, there was an investor who came to me who had three, single-family homes and a duplex and asked if I would buy them from him, because he needed cash.

We worked out the terms of the deal, I put $25,000 down, and the rest was seller financing. Now I am making $1,500 a month from those properties.

Make sure you have the ability to have other people work for you. Hopefully you are getting the excitement of how you can build a life that can be free of a job and where you can be your own boss.

Check out all of the free resources available on www.masterpassiveincome.com/resources.