There are several ways to find this type of real estate bargain. I will begin with the most unconventional methods since they often produce real bargains and then concentrate on conventional methods.

Remember, however, there is no single formula that works all the time. The successful investor has network of people who know that he or she is a real estate investor, and who will tell you about vacant properties, troubled sellers or other opportunities that you could not find on your own. So consider the following ways to find properties, and develop your own, and develop a system, and an organization of people who are helping you.

Unconventional ways to find a bargain

Some owners of "hauling" businesses make much more profit out of the real estate investments they come by than they ever make from their hauling services. Perhaps someone who is contemplating a move, perhaps a new widow or widower calls the disposal service to clean out his or her basement or attic. Over the telephone, the caller says "We are Moving," or "our Aunt just died". In the course of these arrangements, the "disposal service operator" is often the first to know of the owner's intention to place the property up for sale. In this situation, ingenuity and imagination on the part of the income buyer is mandatory, and can lead the astute buyer to some good deals. I offer the hauler $25 for any lead, and $500 if I buy the property.

2. Watch death notices in the newspaper.

Frequently, the attorney handling the estate is mentioned in the notice. If not, inquire of friends, relatives or neighbors of the deceased, or the surviving spouse, to find the name of the attorney. Then, make your pitch to the attorney who may have to dispose of the real estate in the deceased person's estate. In this way, you can become the first to bid. It is rare that a lawyer will insist on any type of commission.

3. Work closely with local attorneys on a personal basis.

These attorneys frequently offer properties for sale on behalf of out-of-state and other type sellers who prefer not to handle the sale transaction themselves or to hire a real estate broker.

4. Watch the newspapers for public auctions, bank foreclosures, and divorce settlements.

5. Check the Probate Courts for filings of deaths and divorces.

6. Follow FHA and VA foreclosure sales. Many of these homes can truly be bought for no money down.

7. Use mailmen and other "Spotters" to advise you of vacant buildings.

Then trace the owners through the local assessors and tax collectors offices. If this does not work, then contact the neighbors and friends of the owner who has moved away, or contact a tenant in the building. Use your common sense to locate the owners.

8. Investor Groups: These groups are not only a good source of support, but can help you locate good deals in bargain properties.

Normal ways to find a real estate bargain

Study your local newspaper for properties that are listed by the owners, not real estate brokers. Sellers who avoid listing their properties with brokers are trying to avoid paying commissions. Commissions are usually paid by the seller, not the buyer. Place ads in the "Real Estate Wanted" columns of your local, and larger city newspaper such as the Chronicle. This method suggested by Robert Allen in his book No Money Down, can be very effective. You will probably receive calls from both brokers and owners selling direct.

2. Real Estate Brokers.

The chances are that you'll begin your serious search by consulting a real estate broker or agent. She or he not only has a large bank of information on what types of property are available, where, and at what price, but they are also familiar with the market in general. They know the details of zoning and highway building plans. A broker can arrange appointments for you to see the type of building you want, inspect those buildings with you, give you information on likely costs of maintenance, taxes, repairs, and other matters. On the other hand, the broker is working for the seller, since the seller pays the commission, and will sometimes go to extremes to close a deal.

3. Internet Search of FSBOs.

The Internet has become a rich source of all kinds of information for the real estate investor. The place to start is www.realtor.com. You can also use www.infoseek.com to look for "For Sale by Owner." The use of the Internet has yet to be fully explored by real estate investors, so experiment and search. You will be rewarded with many opportunities for a bargain purchases.

4. Multiple Listing Services.

Each Real Estate Board puts out a weekly book of all the homes its board members have listed for sale. The book is generally only circulated to other agents, and should not be given to the general public. Some companies will simply not let you, the investors, see the book. Others are less strict and will even let you take the book home. The problem with the multiple listing book is that all the agents have looked over the offerings and any that look good have been sold to their clients, bought by the agents themselves, or are not very good investments. I have found that the best use of the MLS book is to look at the expired listings that have not sold, and then contact the listing agent, who is about to lose the listing, and see if you can't get him on your side in contacting the seller.

Jon Richards is the publisher of NoteWorthy Newsletter, the major newsletter for buyers and brokers of cash flows on the secondary market. It has been published monthly since October 1989.

Jon is a licensed real estate broker, long time real estate investor and an expert in finding, appraising, buying and brokering discounted notes and mortgages. He is also the President of NoteWorthy Investments, Inc, a fifteen year old California Corporation. His company buys 7 to 10 real estate notes each month and has a portfolio of several million dollars in real estate mortgages and other cash flows.

He is the professor and tenured instructor of Real Estate at the College of Alameda in California.

Jon's company is the developer of most of the software now in use in the discounted note industry. These include: Note Quoter, Note Recaster, Working With Realtors and the recent Direct Connect data base program linked to and updated by the Internet.

Jon is also the publisher of the Noteworthy web site and the author of several excellent home study books and courses, including:

• Profits in Discounted Notes
  
  
• How to Start a Profitable Note Business
  
  
• Calculator Power!
  
  
• More Calculator Power!
  
  

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