1. Find someone who is experiencing success right now and find out what they are doing, then do it. I recently heard from my former student Jim Sells, who tells me he now has over 100 rental homes and sees positive cash flow on every one of them. He is now my hero. Jim tells me that his key is to make his profit on the way INTO a deal by always making a low offer. If the seller won't sell at the right price, just walk away.
2. Learn a new way of meeting sellers. We all fall into patterns of behavior, and begin to think that there is no other way of reaching potential sellers. If you are finding it hard to locate sellers who really need to sell, you might want to focus on a technique I’ve used successfully for three decades. Here’s how it works:
Locate a neighborhood where you would want to own a rental property, preferably near a major employer. Locate the property tax information for each address on each street, noting the NAME and MAILING ADDRESS for the owner. When you find a MAILING ADDRESS that does not match the property address, you have likely found an absentee owner.
Since most absentee owners aren’t smart enough to buy my 2014 LANDLORDs SURVIVAL GUIDE, they probably have a negative cash flow or at least they have problem tenants. Trust me, I know these things! Find the owner on the internet and call them on the phone. If you can’t find them, knock on the door and ask who gets the rent. Then see if they want to sell. This strategy works because you are only talking to motivated sellers, and it helps if you can explain how the seller can exchange rather than sell, thus avoiding taxes.
3. Pick a lower middle class neighborhood, near public transportation, where you would like to own a rental property if you could buy one for the right price. Show up on Saturday morning at 9 AM and start knocking on doors. Start at one end of the street and go up and down the block ringing the door bell. Say this: Hi, my name is Joe Schmo and I sure do like this neighborhood. I'm thinking about buying a house here and I wondered if you might know of anybody getting ready to sell? Then be quiet, and see what they say. Don't stop until you have talked with 25 residents. I bet you'll be amazed.
4. Pick another lower middle class area where you would like to buy a home if you could get one for the right price. Have an agent print out for you the 50 lowest price listings in FMLS and MLS for that area. Then make a cash offer for 60% of asking price and email it to the listing agent on each one. This will cost you nothing because the email is free and the follow-up phone call is free.
And I guarantee you will get some sort of response. If nothing else, you will find out quickly which agents are motivated and which sellers really want to sell. Make sure your offers are subject to your approval of a full inspection of the property. Also, it is important to remember that the agent is required to present your offer to the seller ONLY if the offer is in writing.
5. Go to the next meeting of Georgia REIA, and commit to meeting at least five investors that you have not known before. Call all of them, and ask if you can take them to lunch one day. Ask them to show you their most successful investment house so far, and find out how it happened to come their way. Try to repeat their experience.
For the first ten years of my investment career, I believed that each investment house I did was a unique accident. After a while, I discovered that these accidents happened more often when I was out looking for them.
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