Some of the best advice you will hear from successful real estate investors is to treat deal hunting as a full-time job, using all the tools and resources available to make fast and informed decisions. With how competitive the real estate market has become throughout 2020 due to inventory shortages and the large migrations from urban to suburban areas, knowing the best tools for finding investment property is how you can squeeze ahead of the competition. ABL has put together a few online and offline tools that can potentially help you fill a blind spot in your deal hunting and increase your chances of finding a profitable real estate investment.
Being able to perform accurate research quickly is key to finding and securing a great real estate deal. Luckily, there are several online tools that can help you with that task, ranging in degree of details and level of effort.
MLS / Listing Sites
There are many reputable MLS, or multiple listing services, that can help you track down investment properties for sale. MLS require licensed real estate brokers and agents to provide the property listing to ensure the information is verified and accurate. There are established websites like Realtor.com and RealtyTrac.com that compile many of the MLS listings into one location and allow users to browse them for free, although some advanced search functions and offerings are locked behind a paywall. Having instant access to verified properties makes browsing MLS listings an effective way to keep an eye on potential deals in areas you’re interested in.
If you’re in the market for fix and flip property, then websites like Zillow.com or Trulia.com provide a great option to find a quick flip investment. Services like this are powered by users, so non-real estate brokers can list properties as well. You can search by specific cities and states around the country to check home listings, but it also provides information on the local school system, crime rates, etc. This lets you get a more complete understanding of the area that the property is located and help you make an informed decision on investing. If you’re more interested in long-term real estate investments like rental properties, then services like Apartments.com are simple and effective at locating deals in a specific area of your choosing. Like the previous services, it provides full details of the neighborhood so you can decide whether you want to consider a long-term investment in the area.
Websites like Auction.com or Hubzu.com are free-to-use services that let you browse a wide variety of real estate properties that have entered foreclosure and are being sold off to the highest bidder. These services can help reward diligent deal hunters by securing investment property at fractions of a price. They detail the type of property, why it’s up for auction, the remaining time left for bids, and opening bids so you can plan your budget accordingly. In fact, an ABL borrower recently found their latest rental property investment through Auction.com which you can read about here. While the majority of bids occur online, there’s a small portion of properties that require in-person bids at an auction.
One of the best online tools includes Mashvisor’s real estate heatmap, a predictive analysis tool that uses recent home sales, rental info, etc. and compiles it in an easy-to-read color-coded map. Unfortunately, this service does cost money to use its full features, but for investors who appreciate visual data that’s easy to understand at a glance, this tool might be what you’re looking for. Using housing market data compiled for the area you’re searching, you can use metrics such as budget and cap rate to create a hot-or-cold data visualization that can match investment properties with your exact specifications. You can use limited features for free, which still amounts to few more investor-friendly metrics than the typical MLS provides, but the full version gives access to many more data points.
As cliché as it may have become over recent years, social media is one of the best tools for finding specific types of property thanks to the growing use of social media for both individuals and businesses as well as the ability to search hashtags. Zillow put together a comprehensive list of popular and relevant hashtags for real estate investing that can be found here but some great ones to start following include #investmentproperty, #offmarketlisting, and #justlisted to get a jump start on potential deals. The more involved you become in the social media niche for real estate investments, the easier you’ll be able to navigate the hashtags and find which accounts are offering the kinds of deals that you’re interested in.
Driving For Dollars
Being on the ground in the area you want to invest in can help you find deals before they are listed for online platforms, giving you an edge in terms of timing and leverage. This method is called “driving for dollars”, a self-explanatory name where you literally drive around with the goal of finding dollars in the form of investment property. Obviously, this is a time-consuming method for deal hunting, but its reliable and can put you ahead of another investor who is only property hunting through online tools or relying on secondary information.
You can also look for the telltale signs of home neglect that could highlight the potential for a successful fix and flip- distressed exterior, unkempt yards, etc. Not only do these signs show that a homeowner may be disinterested in the property and looking to sell, but they are cost efficient fixes that can immediately improve the property value and net you a sizable profit upon resale. If you find a property in these conditions, you can leave a letter in their mailbox or even knock on the door to see if they have any interest in selling the property and move forward from there. This may sound old school or antiquated, but it’s a method of finding investment properties that has worked for decades and remains a strong option today.
Network, Network, Network
As advanced as technology and social media has become, there is no better way to find a profitable deal than by having a developed and trustworthy network. You can’t have your finger on the pulse of every big hit deal and you certainly can’t be driving through every neighborhood that you want to potentially invest in, so it is important to have other people made aware of what kind of property you’re looking to invest in and can reach out to you if they catch wind of a deal that fits your wheelhouse. This network can include all kinds of people: real estate agents, fellow investors, wholesalers, friends who aren’t involved in real estate, etc. An extra pair of eyes and ears are invaluable when it comes to finding your next successful real estate deal.
Some newer investors mistakenly believe that working with other investors or sharing information could put them at a competitive disadvantage. The fact is that smart investors will try to acquire a deal if they believe it’s a good deal, and if not, they are happy to pass the deal on to someone whom it might be a better fit for. Plus, not every real estate investor is looking for the same type of investment. If someone in your network exclusively works in fix and flips but sees a well-priced parcel of land, they could contact you and recommend you pursue it for your next new construction project.
Every day there seems to be a new tool for finding real estate investments, but the classic methods remain reliable even as technology advances. Make sure to use all the possible tools at your disposal so you can remain ahead of the competition in the increasingly low-inventory markets across the country. Stay vigilant, make smart decisions quickly, and be sure to work with lenders that can work as quickly as you can.
Asset Based Lending can close deals as quickly as 2 days, ensuring that you never miss out on your next successful deal. With flexible underwriting and fast draw turnarounds, ABL can fund fix and flips or new construction loans in record time. If you’re looking for hard money loans for fix and flips or new construction, contact us today.