Asking Agents To Find High Equity Deals

There are lots of different strategies for investing in real estate from short sales to pre-foreclosures to REOs and other bank owned properties to lease options and on and on. My personal preferred strategy is to focus on finding high equity properties and start with a offer that asks the seller to accept a note for their equity.

So, if you are working with real estate agents and brokers to help you find deals then here is how I suggest that agents find potential deals for me.

First, there is a HUGE variety of agents with a very wide range of unique experiences, beliefs, knowledge levels, work habits and personality types. Not every agent is a good match for working with me and I suspect not every agent will be a good match for working with you.

Some agents when I first tell them what I am looking for think they should look in their MLS for properties that list “owner financing” or “owner can help finance” or “seller financing”. Experience shows that this is the wrong approach. The overwhelming majority of sellers advertising that they will accept owner financing are investors like me that are selling on a rent to own or would consider a land contract. Are there exceptions? Yes, but go ahead and test this yourself and you will see that most are not good fits for how I buy.

The preferred way for agents to find potential deals for me involves two steps:

First, if the agent can look up approximately how much is owed on the property (the majority of areas you cannot get good data for this but you can roughly estimate based on lien data from public records). We are looking for properties that are likely free and clear or have very low loan balances. Many agents when you tell them this is what you want, tell you that all the properties in their market are foreclosures and that there is no one like this. I strongly disagree… one third of all properties in the United States are owned free and clear (see this compiled summary chart).

Second, and this is probably the most common way, is to call the listing agent and tell them something like this:

I have a serious buyer who is interested in a single family home like your listing, but he is only interested if they seller would consider accepting a note for their equity if he puts up a down payment. Is this even something your seller would consider?

Some agents will “build up” their buyer (me in this case) to make it more attractive. That can help, but its not required.

Some agents will try to guess terms, interest rates, how much down and so on… don’t bother. It doesn’t matter, at this point, what the seller thinks they want because the property actually dictates how much monthly we can pay (Net Operating Income). All you are doing is pre-screening to see if it is something they’d consider.

Once that happens, the agent should call and provide full info on the property for us to do our offer analysis and make an offer.

I hope that helps you understand how I work with agents to find deals for me.

Until my next post,

James

P.S. To learn more about my strategies and how to implement them in your business, upgrade to our Real Estate Investor Bronze Membership today.

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