Why I Hate the MLS for Finding Deals

I cannot tell you how often I am evaluating deals for Hard Money Clients that are on the MLS.?I spent this weekend evaluating at least 10 MLS deals. Once I evaluate the deal I usually never hear back from them because they obviously did not get the deal, (or they do not like me).

The MLS may seem like a great source of deals, but in truth it is really hard to find a deal without getting LUCKY in this low inventory environment! Once a house is on the MLS the entire WORLD sees it. Your competition is infinite. If it starts out as a good deal, odds are that someone will bid it up past your numbers.

The best way is to go off the MLS and source properties that no one else knows about.?Leave the MLS listings for suckers who want to get into a bidding war and lose any potential at massive profits.?But how can you find these properties??I will give you some ideas below.?Also if you are further interested, please email me for our 90 + WAYS TO FIND DEALS brochure.

WHAT IS THE MLS?

Definition: The MLS or Multiple Listing Service collects all real estate listings for sale in your area. Real estate agents had access to the MLS, but now anyone can use it. If you have been on a site like Zillow or Redfin to look at the current properties for sale, then you have accessed the MLS.

?WHY SHOULD I NOT USE THE MLS?

We understand! Using the MLS to source properties is a low barrier of entry. I mean, all the properties listed on it are there because they’re looking for a buyer, right? But there are a few reasons you should not solely rely on the MLS for inventory.

Everyone else is doing it! When people looking for financial freedom first start out, they usually look for the easiest strategy first. They want the money without putting in the hard work (we call it the lazy syndrome) to hone their skills. And because it is so easy to browse the MLS, everyone else does it too. That means sky-high competition.

You make less profit. Even if by some miracle you find a potential deal on the MLS, odds are that the profit numbers will not work out the way you are hoping. A deal like that will have a dozen other investors bidding, naturally driving the price up through a bidding war that helps no one besides the seller. Whoever does buy the property will be looking at razor-thin profits if they are lucky.?

HOW DO YOU FIND PROPERTIES WITHOUT USING THE MLS?

The goal for sourcing off-market properties is to find houses with problems that need to be solved quickly. You want to target people who are going through life transitions and the property is no longer in their plans. Or, they’re so fed up with a property they just want to be rid of it. Either way, you must have a strategy for targeting these people before they put in on the MLS, or many other investors catch on that this is a great person to market to.?Here are a few of my favorite types of people to target:

Pre Foreclosures?- These are properties that are soon to be sold at an upcoming foreclosure auction and they have equity in them. The way to create these opportunities is to look at the trustee sale / foreclosure sale notices in the legal section of the classified ads in various newspapers.

Probate Properties?– This is when someone inherits a property. Often, the inheritors do not want the property itself and either want to cash out and split the money among the remaining family instead of dealing with the costly maintenance, especially if the property is out-of-state for the majority of the family members. A good technique for this is to look at the list of heirs filings with your local courthouse. This can be found in the public land records.

Out-of-Town Landlords?– I love targeting these people because I know firsthand how frustrating renting out properties can be. It can be a headache even if you live in the area, let alone if you are out of state. Often these landlords/owners are just done with the property and are willing to let it go at a discount just to be rid of it.

?Properties with High Equity?– People will not be willing to sell their property at a discount if what you are offering does not cover what they still owe. If they own it free & clear, they are more willing to make a deal because all that money goes straight into their pockets.

?Hidden Market or Driving 4 Dollars?- The easiest and most effective way I have found to source inventory like this is by the Driving for Dollars method. How Driving for Dollars Works. Driving for Dollars is my favorite method for inventory sourcing because it works so well. It is not easy and takes a lot of perseverance. Hop in your car and start driving through neighborhoods. You can even start in your own neighborhood if you want. You will need to look at houses through the lens of a problem solver and not a speculator because you are looking for homes that are currently occupied but are in a state of disrepair. You also want to note the VACANT properties as well. You are looking for things like unkempt lawns, holes in siding, bad roofs, peeling paint and/or wood rot.

?Once I have a list of potential properties, I start researching who the owner is and how to contact them. Some investors like to send postcards in the mail, but I like just calling them up and asking about the property. I know cold calling gets intimidating for some, but the more you do it, the better you’ll get. Real estate investing is a numbers game, so you have got to get out there and give it a shot. From there, I will either move onto the next phase that we all do: checking out the house, making an offer, etc., or try another property if the owner is not interested. Rinse, repeat, profit.

?FINAL THOUGHT

Using the MLS is fine if you are looking for your own home. However getting serious in real estate investing means finding ways to source inventory without stiff competition. Give my Driving for Dollars method a try and see just what hidden gems you find that are ripe with potential. Remember the goal is to buy wholesale and sell retail. The MLS is the means to sell retail!

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