Introduction to Investing in Rental Property
Welcome to my Ultimate Guide to Finding Rental Property to Purchase.
Today I’ll share several strategies for finding real estate deals and generating seller leads for your business so you can have more options of properties to offer on.
I bought my first rental property at age 20 and have spent many months searching for investment property in multiple cities I lived in for different stints of time.
The principles apply to every city but the results may vary as every market is different in supply, demand, price, and geographical features.
You’ll need to adapt this guide to your specific market to see results!
Don’t worry though, you are going to get tons of value and strategies that will help you start taking action and finding your next investment property.
First off, you need to set your criteria. Let’s begin!
Setting Your Investment Criteria
Before you can begin hunting for properties you have to know what you’re hunting.
You’ll need to create a criteria list not only for yourself but also to give to real estate agents, wholesalers, and other types of people who will be bringing you leads.
Your criteria may differ for each property type (single family homes vs apartment buildings) so it’s okay to have multiple lists.
For example, your criteria list for single family housing may include:
- Year built
- Number of bedrooms
- Number of bathrooms
- Square footage of the property
- How many stories
- Basement or no basement
- Exterior material – siding, brick, etc.
- Small or spacious kitchen
- Attached or detached garage
- How many car garage
Your criteria list for an apartment complex might include:
- Year built
- Number of Units
- Breakdown of each types of units (beds, baths, square footage)
- Square footage of the property
- Amenities (pool, laundry room, game room, fitness facility)
- Do you prefer buildings with elevators or prefer only stairs
- Condition of building (Renovated, Some Distress, Major Distress)
- Occupancy Level
Of course there are many characteristics to a property so use these previous two lists as jump starters for your thinking and continue to add more criteria that you come up with.
Sources for Generating Property Leads
Finding a property to purchase takes a lot of time and effort.
You will have to screen through many property leads in order to find good deals. It’s a numbers game.
The more leads you search through, the more properties you’ll find.
Therefore it’s important to set up systems that generate you leads which we will be discussing below in the remainder of this article.
Lead generation will be key to your success. Are you ready?
What are property leads?
Essentially, they are properties for sale that you will analyze and see if they are going to work out as an investment property.
Your real estate agent may set up a search in the MLS that sends you any new properties that come onto the market for sale matching your search criteria.
Or maybe a wholesaler will bring you deals they have under contract that would fit landlords and fix and flippers criteria as investment property.
Of course you’ll likely search for property leads on your own but the smart investors utilize systems and utilize other people in their network to bring them leads.
It will save you time from searching and allow you to focus more on screening and analyzing the deals brought to you.
One final note: the lead systems that are easiest to use are usually going to have the most competition. If you spend time mastering the lead generating methods that are more difficult, you’ll face less competition.
For example, the MLS is less time consuming but has lots of competition, while driving for dollars or direct mail campaigns take more time and effort and will have less competition from other investors.
How do you get real estate seller leads?
Here is a list of several sources you should be utilizing in your business:
- Realtors & MLS System
- Online Listing Websites (Zillow, Trulia, Loopnet)
- Direct Mail Campaigns
- Driving for Dollars
- Real Estate Investor Networking Events
- Your Own Personal Website
- Bandit Signs
- Paid Advertising
- Additional Methods
#1: Realtors & MLS System Leads
By the time you are ready to hunt for properties you should have a real estate agent you are working closely with as part of your team.
Since you’ve created your goals, strategy, and criteria list, you should be able to send helpful information to your realtor informing them what you are looking for in a property that you want to purchase.
Your realtor has access to the MLS (Multiple Listing Service) which is a local database of properties listed for sale by other realtors that your realtor can scan through and find matches to your criteria.
Then your realtor will get a hold of you to set up showings of the properties so that you can walk through them and inspect their condition before making any decisions.
As new properties come onto the market for sale, your real estate agent will update you.
Some agents have email portals set up that give investors limited access to the MLS to search for properties themselves.
The software enables realtors to see what their clients are looking at and if they like or dislike certain properties.
You can have it set up so that new properties that get listed on the MLS and match your criteria will be automatically emailed to you to look at.
Don’t worry about paying the real estate agent.
This is the responsibility of the seller of the property so make sure you are using the assistance of a real estate agent because it’s free to you and they are experts of their local market area. It will save you a lot of time working with one.
This shouldn’t be your only method for sourcing leads though because often times in hot markets everyone is snatching up MLS properties and it gets very competitive.
You’ll need to use additional methods to keep your funnel full of leads and increase your chance of finding a great investment.
#2: Online Listing Websites
You may have heard of Zillow.com, Trulia.com, or Realtor.com before.
These are online listing websites that pull data from the public records giving average people like us access to information about properties in a quick manner.
The more tedious method would be to pull public records yourself from your county’s appraiser website, but thankfully a site like Zillow.com gives you all the information on number of beds, bathrooms, square footage, year built, etc.
These sites are easy to navigate and allow you to set your search criteria.
For example, you can set minimum and maximum price ranges, the number of bedrooms and bathrooms, the square footage range, as well as many other characteristics.
Once you hit search, a map of your city should come up with several colorful dots or symbols representing pin points of where the houses for sale are located so that you can click on them to bring up more information.
One thing to note is these websites try to give estimate values of the homes such as Zillow’s “Zestimate” tool.
These values are rarely accurate so don’t rely on them if you’re trying to determine how much a house is worth. Use your real estate agent to pull comparable sales data “comps” off of the MLS.
#3: Direct Mail Campaigns
Direct mail campaigns are great for finding sellers out there that your competition doesn’t know about yet because it’s not information everyone else is finding online like the MLS or Zillow.
Everyone can see the MLS listings and everyone can see properties for sale on the different property websites online but not everyone can see sellers who haven’t listed their property for sale yet.
What is a Direct Mail Campaign?
A direct mail campaign is a marketing campaign where you mail out 500+ letters to homeowners in your area asking them if they are interested in selling their home.
These homeowners are targeted individuals that meet certain criteria of yours such as a specific location/neighborhood, or maybe you’ll only target out of state owners who are using the property as rentals or letting it sit vacant.
- Absentee Owners
- Vacant Property
- Existing Landlords
- Probate Owners
- Pre Foreclosures
Why Does it Work?
With these mailing campaigns you are providing awareness to a large number of home owners that you buy properties and that you are an investor.
As you continually send out letters each month to these same people, they’ll eventually see your serious and decide to contact you about making an offer on their home. It can’t be a one and done campaign.
It usually takes multiple letters before they warm up to the idea of selling their house to you.
Why Do These People Suddenly Want to Sell?
This depends on who you are targeting.
If you are targeting out of state owners, they may be landlords ready to throw in the towel and your letter is the thing that finally motivates them to sell their property and be done.
Maybe they are tired of managing and out of state property and want to bring the money from the sale back local where they live.
You’ll have to dig around asking targeted questions to these owners to determine their motivation and come up with a solution of how you can make it a win win situation.
What Should My Letter Say?
Your letter can be customized to whatever you’d like to say but generally it should be asking the homeowner’s if they will be selling their home in the near future and whenever they do decide to can they please contact you first to make an offer on it.
You’ll want to make it clear that you can close fast because most sellers hate a long selling process and the headaches involved so they’ll be more likely to contact you if they know they can get rid of their property quickly.
It’s also a positive when you can offer all cash and avoid the time consuming process using a real estate agent, title companies, closing fees, etc.
Always list your contact information in a clear manner so they know how to get a hold of you in the future.
How to Build Your List to Mail To?
Let’s say you come across a property that appears vacant and you want to know who owns it so you can contact them.
You can search public records to find this information and if you notice that the owner’s mailing address is different than the address of the property you are interested in then it’s an indication they are an out of state owner or using it as a rental property or for some other reason.
You can start by searching properties listed for rent and then looking each one up in the public records to find out who the landlord is.
Create an excel spreadsheet tracking all of the data and information you come across.
You can also hire list companies to automate a lot of this work for you by purchasing pre-existing lists of owners matching specific criteria you have.
#4: Driving For Dollars
What is It?
Driving for dollars is the term for when you physically go out and drive targeted subdivisions with an intent to find vacant or distressed properties.
We talked about how most investors are lazy and only search for deals online, but there are a lot of not yet discovered properties hiding in neighborhoods that haven’t been listed for sale yet.
What Am I Looking For?
Typically signs of vacant or distressed properties include overgrown grass & shrubbery, boarded up windows, piles of newspaper on the porch, and maybe even a code enforcement violation note taped to the front door.
What To Do?
As you drive neighborhoods and spot potential properties, write down their address and some notes about them to jog your memory later when you go to look them up and do research online.
You will want to drive slowly and take your time so make sure to go at an off peak hour when people are usually not home and there is less traffic on neighborhood streets.
One of the best offline research methods is to speak with neighbors of the vacant or distressed property and see what you can learn about the property and its owner before reaching out to the owner.
This will help you craft a marketing letter for that specific owner.
You should have heard of craigslist before but if you haven’t it is an online website platform that acts as a market place for local cities to exchange goods and services.
People can post things for sale or they can post for items and services they are searching for.
If you go onto craigslist.com you’ll see several categories and in particular you’ll want to find the category that says Housing.
Underneath the Housing Category you will then see several real estate topics hyperlinked and you’ll want to select “real estate for sale.”
This brings you to the page specifically for real estate listings that other people nearby are posting.
You can scroll through the listings and see if any properties appeal to you to purchase for your business. Just click on a posting and it will open up so you can read the description, see a map, and retrieve contact details for the seller.
Here are some simple step by step instructions to reiterate the above text.
Step 1: Go onto craigslist.com and find your local city.
Step 2: Under the housing section, click on “real estate for sale”
Step 3: Click in the upper left of the screen to filter “By Owner” or “By Broker” if you are looking for a specific seller type.
Step 4: Look through postings from today, yesterday, and previous days for posts that meet your needs. If you want a property in move in condition so that you simply can buy it and lease it to tenants then in the search bar type “recently rehabbed” or “move in condition” or other phrases to pull up search results of those type of properties:
Step 5: Find the contact details in the post description or in the Reply tab on the page.
Step 6: Contact them and let them know you’re interested in seeing the property for sale.
You can also find wholesalers on craigslist if you want to build your network of property hunters.
Wholesalers scout out properties for investors and they contract them with the seller to purchase and then assign their rights to purchase the property to you for a fee so that you can buy the property instead if it fits your criteria.
Just follow the quick few steps below.
Step 1: Go onto Craigslist again.
Step 2: Find the housing section and post the following message in the “real estate for sale” group and “housing wanted” group.
Post Title: Landlord looking for wholesaler
Post Body: Write about how you are looking for a wholesaler in the area to work with and give them your phone number or email to contact you.
Step 3: You can also go up to the search bar and type in “wholesale deal” or a phrase using wholesale so that posts come up relating to that keyword phrase. Then contact the people who wrote the posts asking if they are a wholesaler and go from there if they respond yes.
Step 4: Record your wholesalers somewhere so you build a list. I recommend using excel to build your wholesaler list and a worksheet will be given to you at the end of this eBook to use. Put their name, contact information, and any other details that will help you remember them.
#6: Real Estate Investor Networking Events
At networking meet-ups you won’t necessarily get leads always but this is a great opportunity to grow your network so that other investors can reach out to you with properties in the future.
You may find leads though if you happen to talk to someone currently looking for buyers to a property but don’t bank on it.
Finding wholesalers at these meet-ups will be beneficial to you if you want to save time and let someone else do the looking for deals.
The majority of people at these meet ups are wholesalers and real estate agents trying to scout business but you’ll also find a mix of investors, landlords, flippers, etc.
Some key tips to networking at these meet-ups:
- Talk to at least 10 new people if possible each meeting
- Business Cards – hand them out so people can get in touch with you
- Discover how you can help others so that they’ll be inclined to help you. If you’ve seen a property that didn’t fit your criteria but fits someone else’s then let them know about it or even wholesale it to them for a small finder’s fee.
The following are several steps will help the beginner real estate investor who doesn’t know what a local meet up will be like or what to do once there:
Step 1: Google “Local REIA Meetings”, “local real estate investors”, “local real estate investing clubs”
Step 2: Visit the websites of the results or clubs you find and copy down the days they meet up. Some clubs charge members and non-members so look for a free coupon for first timers on their website.
Step 3: Attend the meeting. Usually they’ll be held at a hotel or office building in a conference room. When you arrive find the room and there should be a check in table outside of it for you to pay, get details, etc. It varies from club to club and meeting to meeting but there may be 20 people and there may be 100 people so expect limited seating. Arrive early if possible.
Step 4: Listen to the speakers at the meeting and take notes to help your business depending on the topics being covered at the meeting
Step 5: After the speakers presentations are over people will network generally by walking around the room and starting conversations. This is your time to shine. Go around the room and introduce yourself to people and inform them it’s your first meeting. They should welcome you and some will provide you with tips and talk about the club a little.
Step 6: Find out what type of investors they are and how you guys might be able to collaborate and help each other’s businesses grow.
Step 7: Before you go, hand them your business card. It will help you come across more professional and maybe change their mind about needing assistance or who they may know. Your business card MUST have a website address on it. If you don’t have a website, learn how to create your own in an hour with this tutorial
You want them to have some way to learn more about you later after the night ends and everyone departs home. A website will be great at capturing their interest in your wholesaling business along with proving you are serious and professional.
Your website can even have a form for investors to fill out so you can capture leads that come to your website ultimately building your wholesale buyers list.
#7: Personal Website Property Leads
There are lots of people selling their houses each month and in today’s internet age many folks go online to solve their problems.
Put the two together and you get people going online to find ways to market their property so that it sells quickly and they free themselves of the stress in dealing with the whole process.
This is where you come in as a problem solver.
By building a website dedicated to catching seller leads you can sit back on auto-pilot and let people come to you begging you to buy their house.
Don’t be alarmed that people will beg you to buy their house though.
These are called motivated sellers and there are many of them out there who are all selling for different personal reasons.
Some reasons a motivated seller may be desperate to get rid of a property include:
- Just bought a new property and don’t want two mortgages so they need to get rid of the old home
- Probate – received property as inheritance from death in family
- Just lost their job and may default on payments in near future as a result
- Already in the foreclosure process and trying to escape with a short sale
- Need the cash fast
Your website can catch motivated sellers and for sale by owner sellers by simply putting a form on your home page so that when they arrive on your website it’s the first thing that they see.
Your form will include fields to capture the seller’s name, e-mail, phone number, property address, property condition, reason they are selling, and more so that you can look up the property yourself on Zillow or Realtor.com to get an idea of if it will be worth your time to pursue more.
A website is one of the best ways to stand out and can also be used as a form of credibility when networking with people.
If you aren’t technology savvy, don’t worry!
Websites are not very complicated at all and the average person can set one up in an hour or less with little knowledge.
To set up your website you will need hosting.
I personally use and recommend BlueHost. This is the web service company that stores your websites files and databases on their server so that it allows your website to be live on the internet.
When people type in your website URL in the search bar like https://AskNickFoy.com, the server will pull all the website files and load them so that the person searching can see your website.
Don’t get caught up in how the technical side of things works because it’s all behind the scenes and you’ll never have to mess with it.
How Do You Get Your Website Seen By Others?
Organic Web Traffic & Google Searches for Real Estate
Before you get scared off by the phrase “organic web traffic” let me define it.
This method involves people who are naturally on the internet trying to sell their house.
If you know how people search and you know how Google works, then you can generate a lot of natural traffic to your website and convert some into seller leads.
How do people search?
If someone types a keyword phrase into Google like “motivated seller websites” hoping to find a website where motivated sellers list their properties for sale then when the search results come up it’s very likely they find that website within the first few results.
Not many internet users navigate the second and third pages of Google. If what you’re looking for isn’t on the first page of Google what do you do? You refine your search and type something else in bringing up new results right?
So this is why it’s important to get your website ranked on Google’s first page for different keyword phrases relating to sellers and properties that you’re targeting.
#8: Bandit Signs
Bandit signs are great for marketing your business. A bandit sign is a white sign with some sort of printed or written information such as “We Buy Houses” or “Have A House For Sale?” and then a phone number to be reached.
You may have seen similar signs on telephone poles in your local city. Other signs are stuck in the ground at the corner of intersections using H stakes.
Overall, this is a good way to get your business out there as sellers who drive by may see your sign and give you a call.
#9: Paid Advertising
Paid advertising can be used both online and offline. If you want to advertise online you can use Facebook ads to reach Facebook users and spark come leads that way. Learn how to set up a Facebook Business Page for your business.
You can create a Google AdWords campaign so that when people enter phrases in the Google search bar and see search results for their terms your ad will be at the top of the page for those keywords.
Need help running ads? I offer consulting services and would be happy to manage your social media and ads for a monthly service fee. Email [email protected] to discuss strategy and pricing.
#10: Additional Offline Methods
Offline methods can be resourceful as well and most are free.
- Check your local newspaper for listings
- Public postings
- Business publications
- Drive around neighborhoods looking for “For-Sale” signs or “For Rent” signs
What to Do With Your Leads
Once you’ve set up lead generation systems, you’ll need to have a system set up for analyzing them and then converting them into sales.
In my case, I have an MLS search set up for multiple neighborhoods and get emails whenever a new property comes onto the market that matches my search criteria I put into the MLS program.
These leads collect and once per day I open them up and screen through them to see if there are any properties worth looking at further.
I screen properties by looking at their after repair value, potential rent, and pictures of the current condition.
I’ll also read the realtor’s listing notes to learn more about the property.
After analyzing this information I’ll compare it to the current listing price and determine my target purchase price that would make the deal work for me numbers wise.
If my purchase price isn’t far off from the listing price I may contact the agent to set up a showing to get a better idea of the condition of the property.
If the numbers aren’t going to work out during my screen, I discard the property lead. That way I don’t waste any more time only to be disappointed. Time is money. Make the best use of it!
Once I’ve visited some properties and they appear to work out in my financial analysis spreadsheet, I run them by my partners to get their input and we make a decision about moving forward on the investment.
We had one property where the numbers worked out and it would make a nice flip, netting us $60,000 in profits potentially if everything went as planned, but we didn’t pursue the property.
Do you know why? The layout.
There was a master bedroom upstairs all by itself and downstairs was all the kids bedrooms.
No family is going to buy this house placing the parents far from their young kids.
We took into account who our end buyer would be and determined that even though the rehab numbers worked, it was a risk getting someone to buy it due to the layout.
Overall, I hope you’ve gained lots of value from this guide on finding rental property or investment property in general.
Use the 10 methods described in this guide to build a lead funnel that brings in hundreds of leads per month to screen through. Do this and I guarantee you’ll have some deals pop up that are worth pursuing as investments.
The end lesson is make sure the numbers work.
Never force a deal just to do a deal. If the purchase price you need to get the property at is too far below what the seller would be willing to sell for, then walk away and don’t settle for the seller’s asking price.
Looking forward to your success at generating real estate investment leads!
- How to Create a Real Estate Website for Your Business
- Why Your Real Estate Business Needs an Email Newsletter
- The Ultimate Guide to Financing Real Estate Investments
- The Ultimate Beginner’s Course to Real Estate Investing
- Should You Set Up a Legal Entity for Your Real Estate Business
- How to Create a Business Plan for Real Estate Investing
- How to Analyze a Fix and Flip: Real Estate Investing 101
- Sign up for our FREE 10 day email course on real estate investing
- Grab our cheat sheet of 10 marketing strategies to get more property leads
- Check out our YouTube channel for more helpful tips and lessons on real estate investing.
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