In the ever-evolving landscape of real estate investing, staying ahead of the curve is crucial. To help aspiring investors, David Lecko shares his insights on the top five ways to find your first real estate deal in 2024. This blog will cover essential strategies for identifying lucrative opportunities.
Driving for Dollars
The Concept
"Driving for dollars" is a term that resonates well within the real estate investing community. It involves driving through neighborhoods and scouting for properties that show signs of distress—such as overgrown lawns, broken windows, or foreclosure notices.
Why It Works
- Unique Leads: These properties often aren't on standard lists bought by investors, making your approach less competitive.
- Physical Assessment: Seeing the property firsthand gives you valuable insight into its condition, which is vital for negotiation.
David emphasized the effectiveness of this method, particularly for beginners. He mentioned an example where he transitioned from using multiple tools to employing DealMachine, an app that streamlines the entire process. He also noted how DealMachine allowed him to send targeted postcards to property owners, boosting response rates and efficiency.
Tax Delinquent Properties
The Opportunity
Properties with delinquent taxes are often a goldmine for investors. Owners may be motivated to sell to resolve their financial woes, presenting an opportunity to purchase at a discount.
Real-Life Example
David shared a success story where he acquired a property in Indianapolis that the owner, an orthodontist from Utah, was willing to sell at a loss to get it off his plate. This owner was behind on taxes, which made him more open to negotiation.
How to Find Them
- County Websites: Generally offer lists of tax-delinquent properties for free, though the data might be difficult to extract manually.
- DealMachine: Simplifies the process by compiling such data and offering it through their platform.
Code Violations
What They Are
Code violations can be a clear indicator of a distressed property. These include issues like excessive grass growth, missing permits for work done, or accumulated trash and debris.
Why They Matter
Properties with code violations are typically owned by landlords or homeowners who can't or won't maintain them. These owners may be more motivated to sell.
Combining Efforts
David recommended coupling code violation data with the "driving for dollars" method for better results. This dual approach helps in identifying and validating potential deals.
Pre-Foreclosures and Foreclosures
Understanding Pre-Foreclosures
Pre-foreclosures are properties where the owners have received a notice of default but haven't yet been auctioned. These owners might prefer selling quickly to save their credit.
Handling Foreclosures
Foreclosed properties are sold at auctions, and while they present opportunities, the process can be daunting for beginners due to the need for immediate cashier's checks.
David's Tip
David suggested a method called "reverse driving for dollars," where you drive to these properties and knock on doors, offering help and exploring prospects for a sale.
Expired Listings and Tired Landlords
Expired Listings
These are properties that didn't sell within their initial listing period. Owners might be willing to accept lower offers after the listing expires.
Tired Landlords
Owners who've held their properties for decades may be ready to sell, often due to management fatigue or the need for extensive renovations.
How to Approach
- Expired Listings: David recommended tools like Zoom Offers, which simplify making multiple low-price offers on such properties.
- Tired Landlords: High-equity properties that haven't been maintained well are prime targets.
Lessons from David Lecko’s Journey
David's journey from a regular nine-to-five job to owning multiple profitable rental properties provides key insights:
Persistence is Key
Many aspiring investors give up too soon. David emphasized the importance of persistence and gradually increasing your efforts rather than diving into everything at once.
Utilize Technology
Leverage technology to streamline processes. From GIS mapping tools to apps like DealMachine, these tools save time and enhance efficiency.
Build Rapport
Building a relationship with potential sellers and understanding their pain points is crucial. David’s experiences underline the importance of being genuine and offering multiple solutions, including traditional listings or buying for cash.
Conclusion
Finding your first deal in real estate might seem daunting, but employing the right strategies can make a significant difference. From driving for dollars to exploring tax delinquent properties, the actionable insights shared by David offer a robust starting point. Remember, persistence, leveraging technology, and building genuine connections are key to success in wholesale real estate investing.
