by Jon Richards
The best way to begin your career in real estate is to come up with a good, small, older apartment building – well located, and at a low price, with a small cash down payment.
There is several ways to find this type of a real estate bargain. I will begin with the most unconventional methods since they often produce real bargains and then concentrate on conventional methods.
Remember, however, there is no single formula that works all the time. The successful investor has a network of people who know that he or she is a real estate investor, and who will tell you about vacant properties, or troubled sellers or other opportunities that you could not find on your own. So consider the following ways to find properties, develop your own; develop a system, and an organization of people who are helping you.
UNCONVENTIONAL METHODS FOR FINDING A BARGAIN
1. Make a friend out of an owner of a junk and disposal service business. Some owners of “hauling” businesses make much more profit out of real estate investments they come by that they ever make from their hauling services. Perhaps someone, who is contemplating a move, perhaps a new widow or widower, calls the disposal service to clean out his or her basement or attic. Over the telephone, the caller says “We are moving,” or our aunt just died.” In the course of these arrangements, the “disposal service operator” is often the first to know of the owner’s intention to place the property up for sale. In this situation, ingenuity and imagination on the part of the income buyer is absolutely mandatory, and can lead the astute buyer to some good deals. I offer the hauler $25 for any lead and $500 if I buy the property.
2. Watch death notices in the newspaper. Frequently, the attorney handling the estate is mentioned in the notice. If not, inquire of friends, relatives or neighbors of the deceased, or the surviving spouse, to find the name of the attorney. Then, make your pitch to the attorney who may have to dispose of the real estate in the deceased person’s estate. In this way, you can become the first to bid. It is rare that a lawyer will insist on nay type of commission.
3. Work closely with local attorneys on a personal basis. These attorneys frequently offer properties for sale on behalf of out-of-state and other type of sellers who prefer not to handle the sale transaction themselves, or hire a real estate broker.
4. Watch the newspapers for public auctions, bank foreclosures, and divorce settlements.
5. Check the Probate Courts for filings of deaths and divorces.
6. Follow FHA and VA foreclosure sales. We mail these lists out regularly. Many of these homes can truly be bought for no money down.
7. Use mail carriers and other “Spotters” to advise you of vacant buildings. Then trace the owners through the local assessors and tax collectors offices. If this does not work, then contact the neighbors and friends of the owner who has moved away, or contact a tenant in the building. Use common sense to locate owners. Active Management has computer facilities to access all California county records and we may be able to help you locate the owner of vacant buildings.
8. Investor Groups: See the list of telephone numbers and investors groups all investors should have. These groups are not only a good source of support, but can help you locate good deals in bargain properties.