In order to be a successful real estate investor you should start out with a niche. A niche way of investing and a niche area. In other words, when you first begin, try mastering wholesaling then move onto lease options or subject-to. Of course, it doesn’t have to be in that order, but learn one method very well before you decide to learn another.
The same rings true with the location you invest in. If I were to meet you at a local REIA meeting and ask you where you invest, I shouldn’t hear “in Virginia” or “in Maryland.” I should hear a specific city or town and if I probed you enough you should be able to give me the zip codes and even the subdivisions.
You should get to the point that you know your investing location so well that when a seller calls about getting rid of their house, you should be able to know its price within a few grand. (This allows you to quickly jump on deals and not give a seller time to talk with the competition.)
One of the best ways to learn your location is to “Drive for Dollars.”
Simply put, this means driving around the neighborhoods you plan to invest and getting to know them like the back of your hand. Even more importantly, driving for dollars is a great way to get deals. One of the best ways to get to know an area and to get deals is to go door knocking. But I’m realistic and I know 99% of investors refuse to do that.
That’s fine, and you can still learn a neighborhood very well by driving around in your car. While you’re doing this you should keep your eyes out for “for rent” signs and “for sale by owner” signs. Every time you pass one write down the number, pull over and give them a call.
Yes, as soon as you pass a sign you should pull over and immediately call them.
First off, if you wait until later you may never do it. Secondly, if the seller is home and it looks like a deal, you can tell them you’re in the neighborhood and you could go see the house right after you get off the phone.
What you say to a seller on the phone depends on the type of deal. I’ve found that Driving for Dollars works best when calling “for rent” signs and talking with landlords. I always ask them if they’d be willing to sell the house anytime down the line and many will say yes. Then I explain to them how a lease options works, while keeping it all very simple. Then, a landlord will either say yes or no and that’s it.
If they say no, you move on and it’s no big deal. If they say yes, you find out the specific details about the property and eventually set up a meeting. But remember, if the landlord is available try and set one up a visit while you’re in the neighborhood. Even if the seller is “iffy” about working with you, you can at least stop by for five minutes and introduce yourself.
The bottom line is, if you don’t have a specific area to invest, choose one ASAP. And once you’ve got a location start driving for dollars and calling numbers off signs and closing more deals.