Locating Prospects - The First Step There are several ways to find people that want or need to sell their houses.
Using a listing agent is the most obvious choice, but there are other options.
You can post ads online or in the newspaper, hang flyers in public places, or send out postcards and/or letters.
And that's just the tip of the iceberg.
What I'm Looking For Of course, what you're looking for will help determine your method.
If you're looking for a short sale or REO (bank-owned), you're going with an agent.
The same is true for any listed property.
Right now I'm looking for FSBO (for sale by owner) houses; people that have a house for sale, and have chosen to sell it themselves.
Specifically, I'm looking for vacant, distressed houses.
These are houses that have been abused and neglected, that need all or most of the typical cosmetic repairs plus some, and will require the intervention of a skilled contractor.
And when I say distressed, I mean distressed.
Believe it or not, the owner wasn't interested in selling.
Distressed properties are not difficult to find.
FSBOs are.
But, they can be found.
How I Find Houses I drive around.
Literally.
I pick an area of town, print out a map, then drive through the neighborhoods looking for vacant houses.
When I first started doing this I was looking for FSBO signs, the orange and white signs we've all seen growing up, but I quickly learned that not many people are interested in selling their houses themselves right now.
In fact, I've yet to come across a single FSBO sign, and I've seen literally dozens of vacant houses.
So why continue to look for FSBOs if nobody is selling themselves? The answer is simple; some distressed FSBO owners don't know they want to sell the house until I call and make an offer.
That's exactly what happened with the first property I got under contract.
I saw the house from the road, stopped, took some pictures, then found the owner and made an offer.
But before you do all that, you have to put yourself in the right place.
There's no use driving around a neighborhood with a high crime rate; nobody who can qualify for a loan will want to live there (ultimately, these distressed houses will be fixed up and sold to owner-occupants).
You're not going to find any worthwhile rehabs among the luxury homes, either, since the people that live there tend to own their homes and take good care of them.
Where to Look The blue collar neighborhoods seem to be the best.
These are people who work honest jobs, but maybe don't feel inclined to take really good care of their homes.
In these neighborhoods you'll find a good mix of owners and renters, and a lot of older cars parked on the street.
HOA fees (home-owner association) usually aren't collected, so people are free to let their yards get overgrown with weeds and to leave broken-down cars in their driveways.
Finding these neighborhoods can be tricky, though.
On a map, and even in person, a blue collar neighborhood can look a lot like a war zone.
And Antioch, where I'm investing, definitely has both.
Identifying a War Zone, etc.
If you live where you're investing, you already know where the war zones are.
If you're new to the area, like I was to Antioch, you have a few choices.
Meter readers, postal workers, and people working in local businesses can help you.
I actually called the city and asked where the roughest part of town was located.
The gentleman I spoke with didn't even have to think about it.
I printed a map of the area and marked with a felt pen the area I would avoid.
Here's a picture of it: Cropped-down for clarity Lower-priced areas tend to have streets that are laid out in patterns of rows and columns, and tend to be on flat terrain.
High end areas are more sprawling with lots of cul-de-sacs.
Predictably, they tend to be on hills.
Here are some examples: West of Contra Loma has the grid look.
The pen markings track where I've been.
This is the sprawling, cul-de-sac laden area where you'll find high-priced homes.
Once I determine the areas of the neighborhood, it's just a matter of going there and driving around.
I've done this several times now, and each time I learn the area a little better and I get a better understanding of where I want to buy.
But how do I know whether or not a property is one I'd like to pursue? Is it Worth Pursuing? The yard is a good indicator.
Dead lawns and overgrown bushes are the first sign of a vacant house.
Even if a tenant who doesn't care how the house looks will at the very least keep the bushes from blocking the garage and front door.
Oh yeah.
And if the outside looks really bad, you can count on the inside not looking too great, either.
Ultimately, there are a lot of factors that determine whether or not a deal is worth pursuing, and the scope of this blog post is to discuss how to find vacant, distressed houses.
What to Expect Some of the future blog posts will focus on actual experiences I've had.
For instance, somebody's been flagging my Cragislist ads, which is annoying, but it's not the only way I find buyers.
In the meantime, give my tips a try and let me know how they work.
Until next time.
Ted The New Investor Kid http://thenewkidinvestor.
blogspot.
com