There are several ways to buy houses: Houston foreclosures from the downtown auction, Houston pre-foreclosures by mailing to a list of those about to go to auction, or even from the primary website for Realtors (HAR.com).
But what are the top investors in Houston doing to find bargain priced properties? Well, they use several different methods, that's for sure. But one method in particular has been used regularly by EVERY top investor I've spoken to, including myself.
So what is this method? It's buying properties from OTHER Houston real estate investors at huge discounts.
But first, some vocabulary for you: When one investor sells to another investor at a discount, it's called "Wholesaling". The person who buys (you) is called a "Rehabber" if they plan to fix and resell it or "Landlord" if they plan to fix and rent it.
Most new real estate investors don't realize how powerful this source of deals (other investors) can be. Heck, most don't realize that wholesaling even goes on! "Why would another Houston real estate investor sell a house to me for dirt cheap?," they say.
Well, the reason is that the selling investor wants to make a quick buck by selling "as is" quickly an easily with no hassles. The seller doesn't want to deal with fixing it, marketing it, and eventually selling it to a retail buyer.
That's where you step in: You buy the property, fix it, re-sell it, and make the big profits.
I have wholesaled a number of properties in may day, and all of the buyers (investors) made some good money by fixing and re-selling the houses. And I was happy to get some quick $$.
But my best profits have come when I bought from a Wholesaler and fixed and sold the property. I still do a combo of wholesaling, rehabbing, and renting. I wholesale when I need a small amount of fast cash. And I rehab when I'm willing to wait 3-5 months to make the big bucks.
Ok, now you know the basics! So the next logical question is, "Where do I find these wholesale deals?" Fortunately for you, I've become a master at rounding up these wholesale deals, so I'm qualified to tell you.
Just do these four things consistently:
1. Go to most of the RICH Club (Realty Investment Club of Houston) meetings (richclub.org) so that you can get to know some of the active investors in Houston. Find out what deals they are wholesaling. The RICH Club has 20+ meetings per month now.
2. Call ads in the newspaper (Houston Chronicle, Greensheet, Thrifty Nickele, etc.) that say "We buy houses". These ads are always placed by investors. Ask them if the wholesale properties and which properties they're selling.
3. Search the Internet for deals: You can use Craig's List (craigslist.org), the Rich Club's website (richclub.org), Linda Purcell's group (finance.groups.yahoo.com/group/lindas_realty_investments_group), Joshua Berg's list (houstonrealty.us) and more.
4. Follow up with everyone that wholesales deals on a weekly basis with phone calls and emails.
That's about it! But it actually does take a lot of time an energy. I should know. I spend much of my week doing the things above. But it's worth it!
Happy (and profitable) investing,