Finding Deals

• Property Listings - Multiple sources of for-sale listings are available online at no cost to users. Although these "on market" deals can be competitive to get, listings can be a great way to see what is available in a given market and also shows the names and information for agents and brokers who work there. 

• Agents / Brokers - Local real estate agents and brokers are valuable sources of information for both on and off market deals. By developing relationships with those who work in your region, you can sometimes get information that's not generally available to the public that can lead to new opportunities. 

• Networking - Because real estate is very relationship driven, networking is an essential part of finding deals. Search local listings in your area for real estate and investment meet ups, interest groups and professional associations. There are national summits and conferences for real estate investors; always check the biographies of speakers and look for attendee lists to examine the value of these events in advance. 

• Wholesalers / Turnkey Companies - There are a host of companies that specialize in selling investment properties to new operators. Wholesalers make money by getting a finder's fee for tying up the property to sell to the investor. Turnkey companies make money by essentially flipping (doing the rehab) a property to the investor, and then earning residual income as the property manager. While they can be a great source of ready-to-go investments, be sure to analyze the purchase price against returns and weigh risks accordingly. 

Due Diligence - Generally, due diligence means finding out everything you can about a property before you commit to it as an investment. 

• Financial Underwriting - Underwriting is the application of the principles outlined in our Understanding Returns section:   

• Market Comparables - Identify similar properties in your immediate area as market comparables ("comps"), to serve two purposes: 1) checking previous sales of similar properties to compare your prospective sales price to other sales, and 2) determining whether the current and projected rental rates are low, high or average compared to other properties in the market. 

• Physical Inspections - In addition to seeing a property in person, you should expect to hire an experienced property inspector to perform a physical examination of the interior and exterior of the property, with special attention to the age and condition of:

  • roof and exterior cladding 

  • HVAC and electrical systems 

  • foundation 

  • site conditions such as drainage

• Operations Assessment - 

Funding the Deal

• Debt 

• Equity