As a wholesaler, one of the most important questions you can ask is “how can I get the best leads for the least amount of marketing costs?” Alex Joungblood, who does between 3-5 wholesale deals a month in three different markets, believes he’s found the most effective answer to that question. In our recent conversation, he outlined a 4-step process for targeting the best real estate investment opportunities while keeping a marketing budget to a minimum.
How Do We Find the Best Deals with the Least Amount of Marketing?
Alex’s process for finding the best deals with the least amount of marketing is simple. Essentially, it involves extensively researching your market first in order to determine the types of deals that are flying off the shelves and then only marketing to those types of deals. Seems obvious, but how do you approach it?
The exact, step-by-step, four-step process for how to find real estate deals is as follows:
Step #1 – Download a Property List From Listsource.com
The first step is to go to Listsource.com and pull a list. The search criteria that you’ll need to specify for the list are (1) your target market, (2) absentee owners, and (3) transactions of the last year.
Absentee transactions are when the address that the taxes are being mailed to and the address of the subject property are different. In other words, the owner owns the subject property and lives somewhere else.
Alex targets these types of properties when looking for real estate investment opportunities because he finds that the owners are more likely to be motivated compared to the owner-occupied property types.
Step #2 – Sort Through the List
Once you’ve purchased the initial list, sort it to see what property criteria is the most popular in the area. Alex sorts his lists by four different criteria: year built, square footage, property type, and value range. The combination of the criteria of the properties with the most transactions is what Alex calls the “property avatar.” In other words, the “property avatar” criteria would be the most popular property type and most popular year built, square footage, and value range.
Step #3 – Pull a Second List with the “Property Avatar” Criteria
Now that you know the most popular property criteria in your market, you pull a second list. For this list, you pull all the properties in a specified location (subdivision, zip code, county, etc.) that meets the “property avatars” criteria.
Alex advises newer investors or those who have a smaller marketing budget to focus on a single subdivision first. Once successful, they can then scale to targeting real estate investment opportunities within an entire zip code, and then an entire county.
Step #4 – Market to the “Property Avatar” Owners
Finally, you want to create a marketing campaign that targets the owners of the “property avatars” from your second list, and no one else. Eventually, when you get one of these properties under contract, since it is the most popular property type in your market, you’ll have no problem finding a buyer!
We pull a list from Listsource.com for all properties that have absentee owners, have been sold in the past year, and are in the zip code 12345. Listsource.com returns a list of 1000 transactions that meet our criteria.
When we sort the list by year built, square footage, property type, and value range, we discover that the “property avatar” with the highest number of transactions are properties built between 1970 and 1980, are between 1200 to 1500 square feet, are single-family residences, and sold for between $100,000 and $120,000, for a total of 500 transactions.
We input our “property avatar” criteria back into Listsource.com and pull a second list. Since we are brand new investors and have a small marketing budget, we decide to only target the real estate investment opportunities in the subdivision we live in. When we download the list, we discover that there are 50 single-family properties in our subdivision that were built between 1970 and 1980 and are between 1200 and 1500 square feet. We print out 50 “we buy houses” flyers and mail them to all 50 addresses.
Within a week, we hear responses from 5 homeowners and we are able to get 1 property under contract. We present the deal at a local REIA meeting, and after a brief bidding war, we’ve assigned our first contract!
The simple, step-by-step process to finding the best deals with little marketing expenses is:
- Download a property list from Listsource.com
- Sort the list to determine the optimal “property avatar”
- Pull a second list for all “property avatars” in a specified market location
- Market to the owners of the “property avatars”
There are multiple different variations of this strategy for finding real estate investment opportunities, but the foundation is pulling list #1, which is a market guidebook, using it to determine the most popular properties types in your neighborhood, and then targeting your marketing sights only on those properties that are flying off the shelves!
Disclaimer: The views and opinions expressed in this blog post are provided for informational purposes only, and should not be construed as an offer to buy or sell any securities or to make or consider any investment or course of action.