Larry Goins spent years perfecting his Filthy Riches approach to real estate. But, where are the properties that Larry targets to generate so much personal income?
The houses in this program are low-income, distressed, “dog with fleas” homes. They are ugly, unwanted and need more TLC than you can imagine. Most people would assume their next owner came equipped with a wrecking ball.
You might be right, depending on some peoples’ points of view, but you are likely very wrong from the Filthy Riches perspective. These homes might be on the long list for real estate agents, but they are very attainable and, with the right approach, can be amazing money making ventures.
So, with all the houses out there that might fit the criteria of a Filthy Riches house, where does a potential investor begin? Some of the most profitable and fastest ways to locate these houses are below.
Vacant houses: We’ve all seen them. The “It’s a Wonderful Life” types of homes. There may be broken window panes, chipped paint and porches with broken steps. The kind of house that some people might make fun of, but for the right person, it’s everything they wanted.
In a typical deal, the property owner might have inherited the house from a relative or bought the house as a rental property but couldn’t find suitable tenants. Or, the last tenant trashed the place, skipped town and the property owner hasn’t been able to generate the funds to fix the house up to re-rent it.
It might be difficult to find the owner of a vacant house. Some towns have tax records online so anybody can look up a homeowner with the correct address to plug in. In fact, you may just find someone willing in the local tax department to steer you in the right direction, particularly if a home’s taxes are in arrears. Or, you might be able to solicit information from a neighbor, either personally, or through their information via county records and people finder sites.
One “last resort” method that has been used: take your own “for sale” sign and plunk it on the lawn with your name on it. Invariably, the message will get back to the homeowner who will call you to find out why you put a sign on their yard.
If you do have the homeowner’s name, you can contact a credit reporting agency and buy a “credit header.” These look like credit reports on a person – minus their actual credit information – which contains all their contact information, including current phone numbers. To find a qualifying credit agency, just Google credit header.
Realtors: Many properties can be found directly through real estate agents. Before contacting one, you might want to look through their website for properties under $25,000. From here, you can contact the realtor and use a script and projected offer that we discuss later in the Filthy Riches course. Even if they don’t have anything readily available, you can always ask them to put you on a notification list if they get more properties under $25,000.
So, why would realtors be willing to work with you if they’re only getting a 6% commission on a $25,000 house? That would only be $350, right? Wrong. Many companies have a minimum commission, which research has shown can be around $1,500 per property.
REO Realtor: A third option is to locate and utilize a local REO (real estate owned) realtor. An REO realtor is a person who works directly with banks or asset managers who have foreclosed on a property. Call one of these realtors and ask them to pull up a report for you that uses these words: REO, Bank Owned, Seller Addendum Required or Foreclosure. These lists will have the coordinating listing agents that worked on these properties. From there, you have a new list of realtors that work with bank agents and asset managers who traditionally work with these types of properties.
Bank Owned REOs: You might also be able to find properties on bank’s REO websites. This is a great way to look for properties that are listed before a realtor has a chance to list it on the MLS or their own website. If you’re looking to get a jump on the competition, this is a great avenue to explore because you can find properties before other investors have even seen them.
Free Classified Sites: You can use these sites to search for properties or to list your own ad to get homeowners to contact you. If you’re looking for property, be sure to use search criteria such as “handyman special,” “fixer upper,” “cheap,” “cash,” etc.
Houses for Sale Sites: These are similar to classified sites although they are tailored specifically to real estate transactions, both selling and buying.
eBay: You can find some great deals on eBay although you might have to do a little weeding through the ads. Go to realestate.ebay.com and use similar keyword searches as you would for a classified ad. If you are looking to purchase an ad through eBay, be sure that you are just bidding on the down payment. Additionally, make sure you get a general warranty deed. If they are offering a quit claim deed, it may be because there are back taxes or code enforcement issues involved. Regardless, title insurance will help verify that there are no back taxes.
Auctions: Look for local auction companies and make sure you are on their regular mailing or email list. Also, search their website for upcoming real estate auctions. Attending auctions can help you build your buyer list.
Code Enforcement: Local code enforcement officers can tell you what properties may have code violations against them. They may not be able to get ahold of the owners, or the owner may not have the ability to fix the code issues. Some code enforcement officers may be hesitant to provide this information to you, but these records are public information.
Other sources of property information are property management companies (who work with low end property rentals and might know who wants to get out of the business), hard money lenders (who make rehab loans and may have to foreclose on a property for nonpayment), bird dogs (someone who house hunts for you for a commission) and general for rent signs. Often landlords may be willing to sell their properties.
These are some great areas to look if you want to focus on the fastest, best and easiest ways to find properties in order to start making money as soon as possible.