How to Find a Great Deal

New investors often tell me that they can't find properties that will cash flow. When I ask them what they have been doing to find great deals, their answer is almost always that they've been looking on the MLS. In my experience, very few good deals are found on the MLS.

I get the majority of my deals by meeting and knowing people. Take a look at what happened to me yesterday:

One of my buildings is a 6-unit apartment building. I was at the building picking up a couple of rents and fixing a light. One section of my building needs to have the shingles replaced and I will be using a contractor to do that job (due to the height of the roof). I thought I had a contractor lined up, but he has suddenly disappeared. As I was leaving my building, there was a roofing contractor working on the house next door. I went over to talk to the contractor about my roof and the homeowner was also there. We began talking about tenants because the contractor also had a rental. I made a comment about the building across the street that has had some terrible tenants in it recently. As it turns out, the homeowner knew the owner of that building and she said that he tried to sell the building to her for $30,000. THIS IS A SIX UNIT BUILDING and should have rents of about $2,300 per month! When I got home, I called the owner and he does want to sell it for $30,000. He has had a string of TERRIBLE tenants. His daughter got involved in drugs and he spent a bunch of money trying to help her get straight. He is depressed about the whole situation and just wants to get rid of it. He will show it to me at the beginning of the week and I will probably buy it on the spot! The retail value of this building is about $220,000! A great deal would be $100,000. For $30,000 IT IS A STEAL! This is how I get most of my deals - by getting out of the house and talking to people. I buy a lot of properties from disgruntled landlords. Unless you MEET a lot of people, you'll never even hear about these deals. My advice: GET OUT OF THE HOUSE AND TALK TO PEOPLE!