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THE 7 WORST WAYS (AND THE 3 BEST WAYS) TO FIND

BARGAIN-PRICED PROPERTIES

Learn what 7 common methods are the WORST for finding profitable real estate investment deals, and

which surprising 3 uncommon methods will help you achieve financial freedom.

#CREATEYOURFREEDOM

Doug Smith

Learn what 7 common methods are the WORST for finding profitable real estate investment deals, and which surprising 3 uncommon methods will help you get the best properties at huge discounts.

THE 7 WORST WAYS(AND THE 3 BEST WAYS) TO FIND BARGAIN-PRICED INVESTMENT PROPERTIES

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About the Author: Doug Smith, Founder of MyHouseDeals

I was born in Lubbock, TX and grew up on a cotton farm just outside of town. Our family was lower middle class, but our parents always found ways to make ends meet. The consecutive years of bad crops led us to coin the phrase, “That’s just Smith luck” ... which was bad luck of course. After high school, I decided it was time to “get off the farm,” so I went on to graduate from Texas Tech University. I was a Business Administration major. After graduation, I went to work as a software developer for ExxonMobil. I planned to work my way up the corporate ladder.But a few months later, I realized I HATED working there. I felt more like a prisoner than a “career man.” So I looked for other options and read in a few books that most millionaires either made their fortunes in real estate or regularly invest in real estate. So I resigned after one year to buy, fix, and re-sell houses full-time. I said to myself, “no guts, no glory!”But my investing career didn’t go so well at first. After 8 months of hard work and following guru tips, I hadn’t bought a single property. In fact, I was $5,500 in debt.

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But I didn’t give up! After becoming more educated about investing and discovering how to buy properties from wholesalers, how to get leads from the Internet, and how to do short sales, I FINALLY bought my first property. It’s true what they say. The first one really is the toughest!I then bought 41 houses over the next five years. I was able to do this with no prior experience and using almost every creative purchasing method out there. I’m thankful that I didn’t give up on myself. I don’t have to work anymore, but I do because I enjoy it.I’ve been able to give back by sharing my knowledge. To date, my investing tips and articles have been read by over 200,000 investors, and I’ve conducted over 25 seminars to investors throughout the nation, speaking to audiences as large as 800 people.My profits from real estate investing also gave me the capital to start MyHouseDeals.com. But I’m most proud that I’ve been able to transform people’s lives by giving them life-changing advice and access to highly profitable investment opportunities. And that this information has empowered them to make hundreds of thousands of dollars, quit their jobs, and most importantly, enjoy their lives with their friends and family.I sincerely believe this book is for YOU, and will help you take your first steps towards becoming your own boss. See you soon!

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IntroductionWhen starting in your real estate investing career, one thing that you need to be aware of is that there are certain traps; time traps and money traps. Some of the biggest traps are in the way you go about looking for properties to buy.In real estate investing, you are only as good as your next deal, and some ways to go about finding properties are very popular, but are simply not effective. These are ways that are often counted as being good ways when gurus get up in front of an audience and speak, but actually they’re not. You’re about to learn the seven secret worst ways to find bargain-priced properties. You absolutely must know what these methods are because if you use these methods, there’s a very good chance that you’ll be highly frustrated and out of business just as quickly as you got into business.The truth is that many people talk about these methods, about how great this is or how great that is, but they never tell you which methods flat out stink. They make it seem like anyway to find a bargain-priced property is a good way, and that’s simply not the case. You see, I don’t mind offending those people. I just care about giving you no BS information about real estate investing. That’s all. That’s why I’m about to reveal to you the seven worst, no-good, profit-snapping, put-you-out-of-business methods for finding bargain-priced properties. I’ve packaged them up into this book so that you can read it and hopefully remember to stay away from these at least for the next three years until maybe something changes. At this time, these have been the worst ways for me and many investors I know for several years running.I didn’t come up with these methods on my own. I interviewed a lot of the top investors in the nation, and before I came up with this list I compiled all their comments. These investors and myself have been there and done that so you don’t have to repeat our mistakes.

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Now, I’m bringing these seven worst ways right to you.I’m a positive person, but the following message is pretty negative. I just had to give this information to you so that you could avoid wasting your time and your money and ultimately kill your motivation. And because it’s not just about knowing what to avoid, but also what to look for, I’ll close the book with my absolute three BEST methods for finding property – so be sure to stick with me until the end!

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1. The Most Over-Shopped Worst MethodIf you’re looking to spend several hours driving around analyzing and inspecting overpriced, ugly houses and making offers that never get accepted, then be my guest and pursue properties listed on the MLS.

Multiple Listing Service (MLS)That’s right, the Multiple Listing Service. The bottom line is that when it comes to finding bargain-priced properties, myself and some of the top investors in America consider the MLS to be a dirty word or acronym, depending on how you look at it.Way back in the day, this was a good way to find properties. Now, it’s actually one of the worst ways to find deals. They went from good to bad because in today’s investing market everybody and their dog has access to view the listings on the MLS, and when that many people have access to the deals the prices get bid up way too high. That’s exactly what’s happened with the MLS. It’s called an efficient market, and efficient markets aren’t so great for real estate investors like you and me. If you plan to have a Realtor or several Realtors comb the MLS for you looking for good deals, think again. Don’t even waste your time telling Realtors that you buy houses, you want a good deal, you want to pursue listings on the MLS. If they don’t laugh in your face, they will when they hang up the phone. They get calls like this all the time, and they’re tired of getting burned by other investors who never bought a single house.

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Listen, you can get deals from the MLS. It’s still possible. In fact, I still own a rental property that I bought from the MLS. It was a bank-owned, REO property. It was an okay deal, nothing too great. I could have bought three or four houses for the amount of time I spent finding just this one house. It’s just a matter of using your time wisely. Remember, time is money.

HUD and VA ForeclosuresWhile we’re on the subject of bashing the MLS, let’s go ahead and talk about HUD foreclosures and VA foreclosures because these properties are actually listed on the MLS too. Same problem, over-shopped. Stay away. Save your time and energy with the rookies buying them up. Move on to greener pastures and better deals.Now, some folks like to mail to expired listings on the MLS to convince these people to sell for them. The problem here is that almost all of these listings expired because the seller wanted too much darn money in the first place. Do you really want to pursue deals from folks who wanted too much money for their house in the first place? I don’t. It’s a tough crowd overall. Sure, there may be good deals here and there, but overall tough crowd.Do yourself a favor and stay away from the MLS when it comes to buying properties, but be sure to have a Realtor put your property on the MLS to sell it. It’s a great place to sell properties. Yes, I do love the MLS after all, but just for selling.

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2. The Good Luck with This Worst Method“We Buy Houses. Call 555-5555 Today.”“Cash for Your House In 48 Hours. Call This Number Now.” “We Buy Homes. Any Condition Or Situation. Fair Offers.” “We Buy As Is. Fast Cash In 10 Days.” “We Buy Problem Houses. Stop Foreclosure. Quick Cash Now. Call This Number.” You see these all over your local newspaper, and these are just a few of the ads that I currently see in the paper.I can bet you that these investors are not tracking their marketing. If they were, they would know that this plain-Jane, simple, text-only advertising in local papers is probably not working. Sure, you can get deals with ads like these in your local newspaper, but there’s a very good chance that your ads will not generate enough phone calls to make this marketing method cost effective. When you do get a phone call, there’s a good chance that the caller also contacted three or four of your competitors whose ads were right next to yours. One good thing about it though is that many times those other investors with their ads next to yours don’t return their phone call, so that does work out for you sometimes.

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A Better Way to AdvertiseThere is actually a better way to advertise in the local newspaper. Here’s how. Make your ad stand out. A good ad stands out from the crowd. A bad one does not. The difference between a good ad and a bad one can literally be a five-to-one difference in the amount of calls you receive. Strategies for standing out vary between different newspapers, but your best bet is to include some sort of picture in your ad. One top investor who I recently spoke with told me that he started getting eight times as many calls when he included a picture of his baby in the ad and included the headline, “Daddy Buys Houses.” I know it seems cheesy, but it worked. Not only did he get more calls but the sellers were rarely calling any of his competitors, so it had that effect as well.Also, another thing you can do is have a black background on your ad while everybody else has the regular white background. That can make a big difference. What’s important here is that you don’t have to be really creative. You can just simply have the black background, have a picture in your ad. Just duplicate a couple of things I’ve already told you about right now, and you’re likely to get the same or similar results.Now, if you don’t want to put a picture in your ad or do the black background, look in other local newspapers and find an ad that really stands out from the crowd for one reason or another, change it up to reflect your message, which is you buying houses or stopping foreclosure. Then put that ad in your newspaper. You’ll be amazed at the results, especially when you compare it to your previous ad where it was just regular “We Buy Houses” and a phone number.To summarize, the worst thing you can do is put a typical text-only ad, “We Buy Houses” ad in the paper. You’ll get very few calls, and when you do get one you’ll have a lot of competitors to deal with. Instead, make your ad stand out either by including a picture or making it have a black background or copying an ad that stands out in another newspaper.

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3. The Avoid This One Worst MethodNow, if you own Carlton Sheets’ home study course, I’m sure you’ve heard him say it a hundred times, “You need to call the for sale by owner ads in your local newspaper. You need to ask them a few questions. You need to meet them at their house and package some sort of creative financing deal and enough of them will say yes to make it worth your while.” Did this work well in the 1980s? Absolutely. Does it work well today? I’d say no, definitely not. It is a tough game to play.

For Sale By OwnerIn general, calling FSBOs, for sale by owners, is typically an absolute waste of time. The problem is that almost all FSBO sellers want way too much money for their houses, and they’re selling by owner because they want to avoid paying Realtor fees. As you might guess, they’re too cheap to pay Realtor fees. They’re too cheap to sell to you at deep discounts.Only one top investor that I’ve spoken with out of at least a dozen thinks that FSBOs are a good source of deals, and he thinks it’s because he likes to buy houses subject to the existing financing, which is a common way to buy property, by taking over their payments, and he’s willing to buy houses at up to 95% of value. Okay. I say no wonder he likes this method. There are thousands of homeowners who would love to sell at 95% of value. Forget what they want. You should not be buying at 95% of value. That’s a way to get into a lot of trouble really fast.

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FSBO Methods to AvoidHere are the basic for-sale-by-owner buying methods to avoid. #1 is don’t drive through neighborhoods looking for sale signs. #2 is don’t look through Buyowner.com or Forsalebyowner.com trying to find a steal of a deal. #3 is don’t circle potential deals in the newspaper and calling those people trying to find a deal. The only exception to this rule is that if you see a for sale sign that’s sort of hidden and difficult to see for most people from the street, there’s a good chance that this seller hasn’t received many phone calls and you’ll be a welcome caller, and that’ll put you in a great position to negotiate a steal of a deal.

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4. The Are You Kidding Me Worst Method“All right, $55,000, $60,000. Can I hear $65,000? Sold for $60,000.” Yet another property is sold at the local foreclosure auction!

Foreclosure AuctionsThis scene has been played out hundreds and hundreds of times at courthouses throughout the nation.As difficult as it is to see someone lose their home, this is actually a very good thing for real estate investors like us. The opportunities to buy houses in pre-foreclosure will become even greater and so will the opportunity to buy them at the auction. Going to the foreclosure auction to buy properties isn’t as attractive as it first appears. The problem with the auction is the same as the problem with the MLS. It’s simply over-shopped too. Almost every investor who wants to buy investment property, shows up down there. They all bid up the prices in a wild frenzy, and the winner ends up being a big fat loser because he or she paid too much. It’s absolutely insane. It’s a circus. You should go see it sometime.

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Every single top real estate investor that I have talked with agrees with me. They agree that this is the number one place for getting bad deals. Okay, well, so is the MLS. It’s a tie. Just take my word for it and stay away, or feel free to go check it out if you wish. If you wish to just go down there and see what all the fuss is about, feel free to. Just use it to study human psychology as they get so caught up in this auction. Please, for your own safety, don’t participate in the auction. Don’t worry, you won’t see me down there either. I have no plans to be down there because I know how it is.

An Exception to the RuleNow, I do have an exception to this rule. Okay, so let me give it to you, but promise me that you won’t tell your friends. If the auction is on or around a major holiday, fewer investors will be at the auction, so there will be many more deals available, so make sure you’re there with cash or money orders in hand on or around a major holiday such as maybe Christmas, New Year’s, Labor Day weekend, the Fourth of July, Easter, something like that. They’ll be far fewer investors at the auction.

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5. The Way Too Small-Time Worst MethodNow, I’m sure you’ve heard this before. I’ve heard it plenty of times. It goes something like this. “Just go to some of the grocery stores, schools, and churches in your neighborhood and post flyers that say I Buy Houses.” Now, the guru usually continues by saying that your flyer should be on bright paper and that you should print “I Buy Houses” in huge font and that you should have some of those tear-off thingies at the bottom of your flyer so that they can tear them off and call you whenever they’re ready to sell their property.

Creating FlyersWhen I heard that I should do this, believe it or not, I actually did it. I created my flyer, printed out 100 copies, and had an employee of mine post them all over this one neighborhood that I was targeting. It took my guy about two days to cover the entire area, just to go in all these different grocery stores and laundry mats, you name it. He posted a couple of similar flyers. One basically said I’ll buy your house, and it had a phone number. The other one said I’ll pay you $501 if you refer me to someone who needs to sell their house and I end up buying that person’s house. After two days of hard work, my employee and I sat back with great anticipation, waiting for the calls to flow in. We waited and waited and waited, and about a month later the call count totaled to a big whooping two.

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One lady with an unattractive mobile home actually called, but I wasn’t so interested in that. Another lady with a lot valued at $5,000 also called. She wanted actually $5,000 for her property. Not a big discount there is it? The bottom line is this method of finding houses turned out to be a big waste of time. I concluded that the main problem is this, simply not enough people look at the bulletin boards in the community and the ones who do look at them are renters. This form of marketing isn’t targeted enough. It doesn’t go directly after homeowners and even less so motivated sellers, which is what we’re looking for.If you have absolutely no money for marketing, using this method is understandable. Otherwise, it’s silly to waste your time on it. Let me be your guinea pig. I already did this for you, and it failed with a big fat F.

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6. The Do You Really Expect Them To Call You Worst MethodNow, business cards, business cards, and more business cards. You pass them out here. You pass them out there. You pass them out everywhere. After all, they’re only 10 cents each and they could land you the next big deal with a $25,000 payday, right? Well, kind of. Here’s the scoop. Absolutely none of the top investors who I’ve ever spoken with rely on business cards to grow their business. This, like the method of posting flyers in the community, is way too small time.First, let’s talk about passing out business cards to other real estate investors that you might meet at say a real estate investment meeting. In all my days of networking with other real estate investors, I’ve collected hundreds of their business cards, literally hundreds. Usually, when I receive a card from another investor, he or she says something like, “I buy houses at 65% of value minus repairs for all cash. Call me to flip a deal to me. Just keep my card, and call me when you have a good one.” Now, the first few times I heard that I said, “Okay. Great. I’ll call you when I get a deal.” I thought, “Hey, I have a great contact here. I can just wholesale a deal to him.” After about the fifteenth, the fiftieth, and one hundred and fiftieth time, I still said that, but I was thinking no way in heck am I going to call you and the reason is this, because I found out that a few other investors were willing to buy at values much higher than 65%, so why would I sell for the 65% guy?

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Now, if you plan to pass out cards to other investors, here’s what you can expect, okay? If you buy houses at 65% of value, which is what some people suggest that you do, expect zero to one calls for every 100 cards that you pass out. That’s a lot of networking for just zero or one calls I can tell you that. You’re better off finding deals elsewhere besides just networking.

ExceptionsNow, number two is if you pay 80% or 85% of value for houses, this is most likely because you want to rent the properties, expect many more phone calls. Maybe five or 10 phone calls if you pass out 100 business cards. This really depends on what crowd you’re networking with. Are these active investors or just people who are kind of interested in investing and may or may not come across deals for you?Now, number three is if you buy houses subject to the existing financing, expect a good amount of calls too. Most investors cannot do these types of deals. They just don’t have the experience that’s necessary, and they want to pass them on to you. Definitely, if you’re a subject-to investor, keep on passing out those business cards.Now, number four, if you do short sales, which is actually something I’ve put a two-day boot camp on and I focused heavily on this in the past, me and two employees doing short sales full-time, so I have a lot of experience here and letting you know that if you pass out business cards saying you do short sales, you will get a lot of calls because I did that and my employees did that and it worked. We got a lot of short-sale deals from other investors simply because many investors are part-time and short sales, it really works better if you have a little more time to devote to it. You can definitely do it part-time, and I encourage people to do it part-time, but most people just like to pass those short-sale deals on because of the time issue and also just because they don’t have the knowledge to do short sales yet.Now, if you plan to pass out your business card to other people, let’s say people who are not real estate investors who you meet at business meetings, community invents, and so on, you can actually expect very few calls. Their intention will be to call you whenever they need to sell or that

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they know someone who needs to sell, but they simply won’t call. They’ll lose your card or just forget about you altogether. That’s not always the case of course, but most of the time it is.The bottom line is this. Don’t get too excited about drumming up business with your hot, new, and somewhat sophisticated business cards. I don’t care who you are or how nice your business card is, I highly doubt that this method will do much if anything to your pocketbook other than cost you little chunks of 10 cents over and over and over again, unless you buy 80% to 85% of value, you do short sales, you or buy property subject to the existing financing.

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7. The Can You Say Illegal Worst MethodYou’ve seen them I’m sure. They’re called bandit signs, and they’re the little square plastic signs that people put out at intersections and neighborhoods all over the city. Some of the signs say, “I Buy Houses.” Others talk about weight loss or satellite TV or some sort of MLM program, or even some sort of scam. Why do they do this? Well, it’s because they work, or at least they used to.Before we get into all that, I have a confession. I’ve been a very, very bad boy. Bandit signs are against city ordinance, so basically they are illegal, and I’m guilty of putting out somewhere between 3,000 and 4,000 of them over the last few years. Please don’t tell the city officials. They might come into my office and threaten me with a ticket again. Yes, they tracked me down once, and they actually came into my office to give me a warning. Now that I got that off my chest, let’s go ahead and continue.Cracking DownLegal issues aside, I owe much of my profits and my success over the last few years to bandit signs. They were my number one method of marketing to find bargain-priced properties for about a year. Signs brought in somewhere between 8 and 15 deals for me. I forget the exact number, but I know it was very, very good, and I relied on it heavily.

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I wish I could have continued my success with bandit signs, but something very bad happened. The city started cracking down on them and neighbors started cracking down, and they started picking them up by the truckloads and hauling them off day after day, even on the weekends.In fact, many citizens have joined together on a website called Causs.org to fight what they call street spam. Here’s part of a recent posting from their website:“The technique I use to remove signs nailed to the telephone pole, which is about 80% of the ones I see, is to use a steel rod about 3/8 inches in diameter and 30 inches long, just aim for the gap between the sign and the pole and give it a good whack, coming down on the upper-most nail. I can pop a three-nail sign off of a pole in one hit, like a golf swing. It isn’t so much about power as it is about follow through. I’ve also started carrying a pair of surgical scissors for cutting plastic tie straps used to attach signs to street sign poles. I think the regular wire cutters would work as well. Takes about five seconds to cut a sign away.”At least recently, bandit signs are not a good way to buy houses though because they keep getting taken up so darn fast. Then you have to replace them over and over and over again. The costs skyrockets so high that it makes it an inefficient use of your marketing funds. However, for some reason, they are still great for selling houses. Go figure, but it’s true. To this day, I still use bandit signs to sell and lease my houses. Fifteen to twenty signs in the neighborhood all pointed towards my house.Since you’ll need the signs to sell your houses, the following info will be pretty helpful to you. You can expect to pay about $2.50 total for the following, that’s an 18 by 24-inch yellow corrugated plastic sign with black print that says, “I Buy Houses” and it has your phone number, and then also a wooden stake, and then the last one is the labor for someone to put out the sign. Those three things should total up to about $2.50 when you put them all together. If you’re putting out 100 signs a week, which I would suggest that you do if you’re really going to be big on these signs, that you’re looking at $250 per week, about $1,000 a month.

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Now, as gas prices fluctuate up or down, expect the cost of your signs to do just the same. They fluctuate very much since plastic is derived from oil and since you or someone else has to use gasoline to drive and put out the signs. Imagine that. If you don’t want to put out the signs yourself, I completely understand. It’s actually the worst job in real estate, right up there with licking stamps and stuffing envelopes. Oh, and I forgot, knocking on doors. Just go to some of the real estate meetings and ask other investors who they use. Talk to enough investors and you’ll get the answer you’re looking for. In almost every big city, there’s two, three, four people who it’s their full-time job to put out these signs.

Do yourself a favor and actually apply what I've taught you, or actually don't apply these things makes more sense, except the part about using

bandit signs to sell houses, and then I told you go ahead and use a Realtor to sell your houses is often the best thing to do. As much as some of you may

not like Realtors, they can really help selling houses.Instead of using these worst methods, go ahead and

use the three best methods.

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The 3 Best Methods for Finding Bargain Priced Properties

1. The Buy From a Wholesaler Best MethodAll of the serious real estate investors that I know have bought properties from other investors and will continue to buy properties from other investors. When one investor sells to another investor at a discount, it’s called “wholesaling.” The investor who buys the house, fixes it, and re-sells or rents it is called a “rehabber.” Most new investors don’t realize how powerful and work-free this source of deals (wholesalers) can be. Heck, most don’t realize that wholesaling even goes on! “Why would another investor sell a house to me for dirt cheap?” they say. Well, the reason is that the selling investor wants to make a quick buck by selling “as is” quickly and easily with no hassles. The seller/investor doesn’t want to deal with fixing the house, marketing it, and eventually selling it to a retail buyer. I have wholesaled a number of properties in my day, and all of the buyers (investors) made some good money by fixing and re-selling the houses. And I was happy to get some quick $$.

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I’ve also bought from several wholesalers. One of my best slam-dunk deals was actually from a wholesaler. I netted a quick $22,544.51 on that one. I still do a combination of wholesaling, rehabbing, and renting.OK, now you know the basics! So the next logical question is, “Where do I find these wholesale deals?” Fortunately for you, my staff and I have become masters at rounding up these deals, so I’m qualified to tell you.

Just do these four things consistently:• Go to local real estate club meetings so that you can get to know

some of the active investors around town. Find out what deals they are wholesaling. Even if you have to go to 10 or 20 meetings a month, it’s worth it.

• Call in response to ads in the newspaper that say “We buy houses.” These ads are always placed by investors. Ask them if they wholesale properties and which properties they’re selling.

• Search the Internet for deals: You can use Craig’s List, your real estate club’s website, or other online real estate forums that are active in your area. The web is a popular place for investors to post their deals.

• Follow up on a weekly basis with everyone who wholesales deals with phone calls and emails. Don’t expect them to call you when they get a deal. You have to initiate the communication.

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2. The Right Letter Best MethodMany top investors have found discounted properties by driving through neighborhoods, writing down the addresses of ugly or vacant houses, and then sending letters and postcards to the owners. Once these investors become “big time,” they have someone else do this for them. This method takes a lot of time and can be quite boring. That’s why investors hate it. But if you do it consistently using the right letters you will buy some houses. That’s why top investors love it.

Just take these steps...1. Identify the part of town where you want to buy houses. The homes

should be in LOW-INCOME areas ... but not in “war zones.” You simply won’t find enough vacant houses or motivated sellers in most of the nicer areas. If you would live in the neighborhood, it’s probably TOO NICE.

2. For 3 to 5 hours per week, drive through the neighborhood and write down the addresses of the properties that are vacant. Some people like to speak the addresses into a voice recorder. It’s up to you.

3. If you see anyone in the neighborhood who appears to live there (maybe they’re in their front yard or in their driveway or walking down the street), stop them and say something like, “Hello, I’m looking to buy a house in this area. Do you know of any vacant houses? Or do you know of anyone who needs to sell?”

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4. As you drive, mark off the streets you’ve traveled on a map so that you don’t cover the same streets twice.

5. After you’re done each week, type the addresses into a computer and mail the owners a letter that basically says ... “I drove by your house the other day and it appeared to be vacant. I buy houses. Call me.” You can get the owner’s mailing address from the appraisal district’s website.

6. Continue to mail letters and postcards to each vacant property. Mail up to five or six letters before quitting. Persistence works!

7. Even use a special program to manage your mailings, if you wish. I use Scott Rister ’s direct mail program. You can learn more about it at findmotivatedsellers.com.

Here are 4 things to look for so that you can identify a vacant property:

• Overgrown lawn• Newspapers in the driveway• A rubber band sealing the mailbox shut• Fliers on the door

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3. The Buy From Out-of-State Owners Best MethodBuying properties from out-of-state owners is what I consider to be the most overlooked method for getting great deals. Why? Because many top investors are NOT pursuing this method. But here’s the situation: Those who weren’t pursuing this method said something like, “Yeah, I need to be doing that.” And the ones who were already doing it absolutely LOVE it! The worst comment that I’ve heard about this method was as follows ... “I tried mailing to out-of-town owners. I got a deal from it, but it seemed like the sellers I talked to were getting a letter about once a month from another investor or Realtor. So the competition was a little stiff.” I disagree with the stiff competition concern. Compare that to the pre-foreclosure list where sellers are getting 10-30 letters a DAY. So, sending a high quality, warm & fuzzy, and somewhat “salesy” letter to out-of-state owners works wonders. Notice that I’m referencing out-of-STATE owners, not just absentee owners. An absentee owner could live down the street or across town. So their level of motivation is likely to be lower. They can more easily rent, sell, or take care of the property. An out-of-state owner, on the other hand, is too far away to deal with the property.

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Out-of-state owners typically have one or more of these problems:

• The house is vacant, so they’re worried about vandalism.• If they have it on the market, they’re probably frustrated that most

potential buyers are too picky. And the owner is not there to make the house look nice for showing.

• The house is vacant, so they’re paying for a house that they’re not using. And on top of that, they’re probably paying for their new house, so they have 2 house payments.

• They have a non-paying tenant in the property.• The property needs repairs, but they’re not in town to oversee the

renovation.• They have a property manager who is not taking care of the house.

After all, the manager knows that this owner is out-of-state and can’t see the day-to-day property management problems.

There are several ways to get a list of out-of-state owners, ranging from free to costing $400 or more. You decide how much you want to pay. But the more you pay, the better the list gets. Here’s what I mean... For free, you can go to your county appraisal district’s website and pull up property records one at a time to see if the owner lives out of state. Free? Yes. Unbelievably time consuming? Big yes. I don’t advise doing this. There are better things you can do with your time. A better way is to request a file from the appraisal district. Just call them up and say that you need a listing of single family houses on a file. And you need the list to include owner names, mailing addresses, and property addresses. Almost all counties require that you write a letter requesting the file and then they’ll mail it you. And they WILL charge you for this file. I called several counties and got prices ranging from $20 to $400 per file. Once you get the file, you’ll open up the Excel file that contains the list. Then, sort by the mailing address state field. You can delete those that are in the state where you’re looking to buy. And you’re left with out-of-state owners. But you’re not done yet...

27

The biggest gift you can give to yourself is actually going out there and pursuing these wholesale deals

and motivated seller leads. Even if you’re a new investor, go ahead and make

mistakes, trip over your own feet a few times, buy your first house, get that one done with, and proceed to make $15,000 or $20,000 per house on all the deals that you do for years to come and live

happily ever after.

There’s a VERY good chance that 20% to 30% of the mailing addresses are no good. Appraisal districts just aren’t good at keeping that info up-to-date. So, if you want to get the current address for those people, you’ll need to “clean your list.” You can do this by paying a “list cleaning” company $250 to $450 per thousand names.Another good way to get this information is to call a “List Broker”. These folks can get information from many different sources, compile it, cross-reference it, etc., and come up with a list of out-of-state homeowners. Ok, so some of them can. I recently called 14 different list brokers and only 2 of them had a list. You can expect to pay about $250 for a list of 1000 out-of-state owners.