Hey Brian,

I absolutely love your real estate articles. I have studied Rich Poor Dad’s stuff as well as many other books and REI programs.

Can you elaborate on how you are finding deals?

Thanks, K.T.

Hey K.T.,

I am finding deals two ways.

First, I am finding them on basic old har.com (Houston’s MLS website, your city probably has something similar). Some people assume there is a magical list of deals somewhere that isn’t accessible to the general public. But there are great deals showing up regularly on the biggest public website. They don’t last long, so you’ve go to know what to look for and move quickly. I’ve put together a little video that shows the process I actually go through here:

[youtube]http://www.youtube.com/watch?v=e8AdQ-MGL7w[/youtube]

Most of these techniques I’ve learned from a group of real estate investors here in Houston. Most major cities has an MLS website like har.com in Houston were 95% of all residential real estate listings end up. You can find yours most likely by typing “mls real estate [your city name]” into Google or asking others in the real estate industry.

I select a maximum price and a minimum square footage so I can target a price per square foot below about $45 to look for foreclosures. Houses with a low price per square foot are typically in poor shape and are attractive to investors.

Then I’m doing “comparative market analysis” (aka finding comps) on the houses to see what they are worth. I use a tool called Quest to do this (only works in Houston), but it can be done the long way also by pulling up the comps yourself on the MLS website. If you need to pay to get access to a site like this (as I do) it’s probably worth it.

The goal (at least for me) is to find a house with a large spread between the asking price and what I think it’s worth after all repairs.

The second way I’m finding deals is through listing agents. Basically I contacted a bunch of real estate agents, and filtered through the majority of them who only patrol the MLS website. I searched for the minority who actually go out and get their own listings. If you can establish credibility as an investor with a couple of these agents, they will bring you the deals!

You can find a list of agents in your zip code using the MLS website and just start calling the entire list. Or if you find a good deal using the first method I described, you can stay in touch with that agent to see what other listings they get.

It can be tough to establish credibility with one of these agents because they get called by investors all the time who do nothing but waste their time. Just be honest and tell them you don’t really know what you’re doing. Don’t make big promises. They are looking for someone who:

1. Knows how to analyze a deal and can make a decision right away
2. Doesn’t need to have their hand held and see 10 properties before buying one (often you can make an offer sight unseen just by analyzing the numbers)
3. Won’t try to lowball an already great deal (another investor will offer the asking price and you’ll never get it)

You might have to call 20 agents to find one good one that will bring you deals like that (forclosures, short sales, etc).

Hope that helps and best of luck!

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