Finding Great Deals in Hot Markets
With interest rates at a record low for an unprecedented amount of time, property markets are hotter than ever. Every person and his dog is out there hunting down a deal that stacks up, and the competition is fierce.
Most people tend to waste a lot of time doing random searches for deals on “retail sites,” usually after work or late at night, which yields little results, due to their frame of mind.
Those who happen to stumble across an opportunity take no action because they haven’t laid out a plan of attack on what to do next. So, instead they print it out, put it in the top drawer and move onto the next bright shiny object.
This single-faceted approach of searching for deals is doomed from the start since it tends to lead to distraction, boredom and becoming disheartened with your efforts.
The truth is, if the deal is on the internet, it’s probably too late and not worth pursuing in a hot market. So, how do you get an edge over other investors and homebuyers to start getting great deals flowing your way?
The key is to take a more sophisticated approach and have multiple irons in the fire to ensure at least one of them is going to burn brightly. Below are five strategies I like to use concurrently to start building momentum in getting quality sites flowing my way:
Letter Box Drops: The purposes of a letter box drop is to find out which homeowners might be interested in selling their property off market, and then getting them to call you. This is often seen as a shotgun approach based on the one-percent return on your investment. By this I mean one out of 100 people that read your flyer might call you back to show interest in selling you their property.
It can cost about $1,000 to pay a junk mail delivery person to drop your flyer into approximately two thousand letterboxes. I like to leverage this a little further and use PriceFinder to target owners with properties I’m interested in. Even if they’re not for sale, you never know how close owners are to putting their property on the market.
For example, if you’re looking for subdivision opportunities, PriceFinder will spit out a list of potential subdivision sites if you filter a suburb down to properties with a lot size of over 800m2, or double the minimum lot size in your area. From there you can target those specific property owners by posting a letter, dropping a flyer in their letterbox, or having an agent contact them on your behalf.
You can read more on how this strategy works by clicking here
- Talk to and Educate Agents: Get crystal clear on what type of deal you are looking for, so you can articulate that information to your agents with clarity.
If an agent brings you a deal, work with them and educate them as to the reasons why or why you didn’t want this deal. Show them your numbers and provide feedback. Most investors and homebuyers rarely make the effort to communicate with an agent, let alone provide feedback. By giving them your time, you stand out from the crowd.
Show your appreciation when agents bring you potential sites. Reward them with a small gift, like a box of chocolates or movie tickets to show you are grateful to them bringing you a deal. This builds rapport and encourages them to bring you more deals, too.
- Look Outside Your Property Circles: The beautiful thing about property investing is there are always buyers and sellers in any market. This is because it doesn’t just rely on external facts to keep the market moving. There are always reasons for people to buy and sell, no matter what.
Divorce, deceased estates, downsizing, upsizing and many other personal circumstances motivate people to sell or buy property. Your job is to keep an ear to the ground, so you can help those who need to trade their properties for something more appropriate.
It could be at a barbecue, while waiting in line at the supermarket, or when you are networking with others at the gym. Just remember this mantra, “You are in the right place, at the right time, with the right person, for the right deal.”
- Networking Groups: My favourite bit of advice, of course, is to consistently attend property networking group meetings, so you can hang out with other like-minded property investors.
If you don’t have one in your area, you can start your own. You only need one other person to begin, and it will grow from there. We now have over 3,000 property investors attending our monthly networking group meetings, which all started with just six people meeting up regularly for dinner each month.
The key is to attend on a regular basis and stay accountable to others to ensure you show up.
- Use PriceFinder or Another Paid Online Researching Tool: If you’re serious about property investing, at some point you’ll need to invest in one of these paid resources. Programs like PriceFinder are like having x-ray vision for property investors. This type of researching tool will keep you ahead of the pack by accessing:
- Past Sales History – Great for working out vendor debt levels.
- Comparative Sales – The streets and suburbs at the click of a button.
- Specific Filtering Tools – Find development sites and splitter blocks.
- Advanced Search Functionality – To look for motivated sellers.
PriceFinder is my weapon of choice, as the data is second to none and anyone who knows how to turn on a computer can use it. It saves me hours of wasted time because I can filter out the dud properties from the golden opportunities without having to leave my desk.
For a comprehensive review between the three big players of property data research, click here
- Past Sales History – Great for working out vendor debt levels.
With five irons in the fire, your ability to start accessing deals should start to flourish. Of course, there are other avenues to bring deals, but the above strategies are at the top of my list.
Like all things, it’s critical you approach the task with the right mindset.
What I’ve discovered is there are two groups of people when it comes to finding great property deals. They are as follows:
- The Glass Half Empty Folks: Those who believe deals are hard to come by and struggle to find anything that stacks up.
- The Glass Half Full Folks: Those who believe quality property deals are in abundance and consistently get access to them.
Ultimately both groups of people are correct and it comes down to which group you prefer to be amongst. Choose wisely and start implementing the five deal-finding strategies today.