Embarking on the journey to secure your first real estate deal may seem daunting, but it's perfectly achievable within a short period. By dedicating a focused week to your goal, you can lay down the foundations for success and notch your first deal.
Why Getting Your First Deal Matters
Securing that first deal is obviously the first step to starting your real estate career, but it's particularly pivotal in your journey for two reasons:
- It generates income. Even a modest deal, say a $5,000 profit, creates a tangible financial gain from seemingly nowhere, proving the viability of the real estate business and giving you a source of starting funds for marketing.
- It builds confidence. Successfully replicating the process of closing deals fuels the belief in your capacity to make a significant career shift towards real estate.
As real estate investor and CEO of DealMachine David Lecko puts it:
“For me, the first deal's significance transcends the actual money made. The realization that you've materialized $5,000 out of thin air is astonishing.
Completing that initial deal is a testament to your abilities — a confirmation that the success stories aren't just for others but can be your reality too. With solid proof and the generated income, you'll find your confidence soaring.
So, where do you begin? Let’s delve into a detailed 7-day strategy, enriched with insights from David Lecko.
Day 1: Identify Distressed Properties
Begin by canvassing neighborhoods close to your residence. Look out for properties that show clear signs of neglect.
These are tell-tale indicators you're after:
- Unkempt yards with overgrown vegetation
- Mailboxes brimming over, indicating prolonged absence
- Garbage cans left curbside long after collection days
- Fading or chipped paint suggesting lack of maintenance
- Windows that are boarded or shattered
- Temporary coverings on roofs, indicating unresolved issues
- Visible damage to structural elements like porches or fences
Don’t get caught up in the small details. If a property clearly stands out for its state of disrepair, it's a candidate for your list. Employ an app like DealMachine to efficiently record and track these distressed properties.
Day 2: Research Owners
With a substantial list in hand, it’s time to uncover who owns these properties. Utilize various online platforms, local county records, and other resources to gather this information. If you're a DealMachine member, this step is essentially done for you, as every lead you add into the app during your driving/canvassing will already contain all the owner's contact information inside the lead card.
Focus your initial outreach on owners residing in their properties. These individuals often have more pressing motivations to sell quickly compared to absentee landlords or investors. That said, don't exclude any prospects; prioritize occupied homes but also reach out to the others.
Days 3-5: Communicate with Owners
The next step is to initiate contact with the owners about their willingness to sell. Multiple avenues exist to do this.
- Send postcards
- Make direct phone calls
- Send text messages
- Utilize emails
- Engage in door-to-door visits
- Strike up conversations opportunistically
Your initial communication should be straightforward:
"I have an interest in purchasing properties for investment purposes in your area. Your home on Main Street caught my attention due to its condition. Would you consider an offer in cash for your property?"
Should they show interest, propose to inspect their property or arrange a time to discuss the potential sale.
Be prepared to engage with a large number — at least 500 property owners — to identify a few serious leads. Resilience and a disciplined approach will be your allies. Avoid fixating on a single property you've been eyeing; this endeavor is a numbers game.
Days 6-7: Walk Through Properties
For those owners inclined to consider an offer, arrange to visit and inspect their property. This is an opportunity to establish a connection, comprehend their circumstances, and evaluate the extent of repairs required.
Be ready to present an immediate cash offer, grounded in local comparable sales and the cost of necessary repairs.
Your assessment during the walkthrough should inform your offer. Having data on recent sales of similar properties in the area on hand is imperative to substantiate your bid.
Beyond the First Deal
Securing that initial deal is only the beginning. The experience paves the way for a career in real estate investing, empowering you to leave your current job if that's your aspiration. Future deals can catalyze the formation of a dedicated team and refinement of the investment process.
So, take the plunge without overthinking. Your first deal is waiting to be discovered in the next week!
About Benjy Nichols
Benjy has been a media specialist at DealMachine for the last 2.5 years. He produces, writes, shoots, and edits our media content for our member's DealMachine and Real Estate education.