Investing Fun: Searching for the right property

Last time we talked about letting the professionals help you with your rehab instead of doing all the work yourself. Today I'd like to give some tips for finding the right property.

One of my best tactics for finding deals is what I call "farming." It's really a common term among investors. But it's one of the best ways to find deals and to get familiar with your "farm," or the area where you are investing. Have you ever driven by a house and noticed the yard hadn't been cut in months, maybe windows were broken, and the owners were no where in sight? If you're like me, you get really excited to see a house like that. The owner could be a very motivated seller in disguise who for some reason just hasn't been able to or hasn't even tried to sell their property.

I love driving around my area and looking for these. It's really simple to gather a whole lot of information about the property in very little time! The first thing I do is find a neighbor-- they're never hard to find, and they're always nosier than you think-- and ask them if they know anything about the house. You'll be amazed at how much information the neighbors can give you! In a couple cases, the neighbors were able to point me towards other pre-market properties in the area that I otherwise wouldn't have been able to know about. And once, the neighbors offered me their house! You'll find a wealth of information from the neighbors.

Even if you can't find a neighbor, the Internet holds a wealth of information about properties. After I speak to the neighbors, look at the property and take some pictures (you can go ahead and be jotting down what sort of rehab work you're in for), I find somewhere with internet and jump on the county's tax assessor website to look up information about the owner, square footage, last sale date, how much they paid for the property, I can even see if they started rehab if they got a building permit. Here's what my local website looks like: Real Estate Search.

Whenever you find out who the owner is, look up their phone number on the Yellow Pages and jot that down. You want to get a gameplan together on what you think about the property. Often you'll know how motivated the seller is after you've spoken with the neighbors-- maybe a family member died, divorce, you never know. And don't be scared if the owner is another real estate investor. They may need to dump the property and haven't found a buyer yet.

Above are some houses I found while farming my area, I just snapped the pictures with my camera phone. Sometimes I find these properties by accident just by taking a different route home than usual, or I will purposefully spend time to go and look for possible deals. Remember, this is a business and spending time searching for deals is business time (and business miles to deduct from your taxes ;-) ).

Your next step is speaking with the seller and negotiating. I'll go more into negotiating in the next blog!