• Private Auction Companies
  • Pros – Most legitimate auction companies have associates that will negotiate the deal prior to booking the auction. Most auctions have deals that don’t go above the 70% of the ARV. Auction companies also guarantee clear and marketable title, so you don’t have to worry that you are buying a lemon.
  • Cons – Auction companies have stern rules about closing deadlines as well as steep deposits that are non-negotiable and non-refundable. They also typically will only accept cash or hard money as payment.

• Wholesalers
  • Pros – As with auctions, a wholesaler’s job is to negotiate the deal for you and he makes his fee on what he sells to you over what he’s negotiated. This works out for you because his sole purpose is to find the deal, determine its value and negotiate it based on its ARV. All these tasks are time consuming and can sometimes take months to negotiate a seller down. If you are simply looking for a good deal without all the hassles of dealing with a seller these are the guys to deal with
  • Cons – Anyone can learn to wholesale by picking up a book at the local Barnes and Noble. Be wary of the wholesaler you are dealing with because what those books don’t teach is how to fine tune getting comps and determine value. Look for wholesalers, who also work in other fields like Rehabbing or Landlords, they know the values in their neighborhoods.

• Local REIA
  • Pros – This is your local Real Estate Investment Association and they are not hard to find. They usually sprout up in every major metro area and have bi-monthly meetings. They usually have many specialists in many areas attending, if you don’t go find a property it’s still an excellent way to network with other like minded people.
  • Cons – Everyone and their mother who are investors or who are looking to get into investing show up at the REIAs. It can be a real amateur hour, but once you get used to the business you’ll be able to spot who knows what they are talking about and who the newbs are.

Where can I not find good deals?

Although there is the occasional deal on these areas, they are few and far between. You are much better off focusing on the previous avenues; you will yield much better results.

• Court House Auctions – These are by far the worst way to buy real estate. In our state you cannot view the inside the property before the purchase, which for a rehabber is detrimental because we have no way to determine what work actually needs to be done or if there are any major structural defaults. There have also been cases where you buy a property with liens that will eat away at your budget. Another horrible term they give you is if you are buying a tax sale they hold your money while the owner still has a certain time to redeem their property. Court House Auctions can tie up your money for a long time and then you still don’t have a property at the end of it all.
  • Now you might wonder what the difference is between a Court house auction and the Auctions I mentioned previously in this article. The main difference is that with private auction companies they are selling the property for an owner, whereas the court house is selling for a bank or the state. Also Private Auction companies gaurantee Clear and Marketable Title, and can usually let you settle within 30 days.

• Multiple Listings – The problem with the MLS is that you are fishing in a pond where millions of other people have their line in. Also, in many cases an investor that has a good relationship with certain realtors will receive listings before they ever hit the open market. Its best just not to waste your time scanning the MLS when there are other ways to find a good deal these days.

• Craigslist – The problem with craigslist and other sites like this is the same as the MLS, you are fishing in a cluttered pond. Another big issue with these listing is that you have many FSBO owners on here who didn’t even want to give the listing fee to a realtor, so what chance do you have to negotiate them down?

Now you have the info you need, Happy Hunting!

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