There are 2 real estate markets for purchasing properties: The public market which is considered "buying at retail" or the hidden market for buying properties deeply discounted for profit at "wholesale".
Public Market: Retail
- Real Estate Agents and Brokers (MLS)
- Newspapers, Shoppers Guide, Thrifty Nickel etc.
- For Sale Signs – in front of properties (Realtor & FSBO)
- Pre-foreclosure Lists
- REO Bank Owned
- Title Companies
- Code Enforcement
- Appraisers
- Probate Attorneys
Hidden Market: Wholesale
- Vacant Properties
- To locate the homeowner you can use a skip tracer, check property records and or tax records. Start with the neighbors, they will have a vested interest in helping you locate the owner to improve the neighborhood!
- Referrals, Bird Dogs & Wholesalers
- Your Marketing to Attract Motivated Sellers
- Bandit Signs: "We buy Houses CASH"
- Car Door Magnets:
- Business Cards w/ Referral Fee Offer
- Gold Mine Ads "We Buy Houses Cash" etc.
- Search Classified Ads for the following…
- Wedding Dress for sale
- Moving sale / Garage Sales
- Property Management Companies & Landlords
- Poorly Managed Properties = Frustrated and Motivated Landlords
- Run Down Property with a Low Occupancy = Negative Cash Flow
- Purchase at a Discount
- Simple upgrades to the property could increase occupancy and cash flow
- Landlords wanting to retire and sell off their investments
If your main strategy is "Assignment of Contracts" focus on the hidden market. You will have more negotiation power working directly with the homeowner. Avoid realtor-listed properties unless you are getting that property at a deep enough discount that you can factor in the realtor fee into the equation. The realtor commission is going to take a big bite out of your profit margin, run the numbers!
You can work with a realtor for "ABC Transaction" aka "Double Closes, Simultaneous Closes, Escrow Closes". Make certain that you align yourself with an investor friendly realtor that doesn't mind working hard and submitting low ball offers. Your realtor should also have experience with submitting offers on REO properties. The market is full of bank owned properties and there is a ton of inventory for ABC Transactions! Dealing with REOs requires patience, but the pay off is worth the wait!
