Finding Big Profit Deals seems to be a mystery to most investors both new and old. However, after doing countless deals over the last 18 years this has never been an issue that my company has had.
So I figured I would share two great ways of finding deals. If you want the high energy video version where I get crazy passionate, click on the video as I walk you through it– especially the first 3 minutes.
Let me break this down for you on a few places that I’ve located deals where most investors never look:
#1 DEMOLITION LIST : Almost every city has a “demolition list” that it publishes on a monthly basis. This demolition list is comprised of properties that have been “tagged” by the city as potentially hazardous, unruly or an unwanted eyesore. (Music to my money making ears, and wallet).
You see, when a homeowner allows their yard to go unmaintained (does not mow their grass), leaves cars on blocks in the front yard, has broken windows or has had a fire (to name a few), the city deems this property as a hazard.
At first , the home is “red tagged” which is basically a piece of red paper left on the front door of the home by the city ordinance office saying get this fixed or we will fine you.
If several red tags are left and not responded to, the city can lien the home (which means put a levy on the house) for any work the city may do to make the house safe, i.e. board up windows, mow the lawn, haul off old cars.
If the homeowner continues not to respond to city notices, the city will have a meeting with either a) city council members (or) b) a board designated by the city for city ordinance issues. This board then votes if the house will be put on the city ‘demolition list’ because the homeowner has failed to respond to the city notices or has not sufficiently fixed the issues left on the cities “red tag”.
HERE’S WHERE IT GETS GOOD!!!!
These city meetings are public notice and are held once a month. Guess who shows up to these city meetings? HINT: If they’re smart (and many times they’re not) the homeowner (ALSO KNOWN AS THE DECISION MAKER).
So here is Joe Homeowner, city before the city board, with obviously either a) no money to handle the city repair list or b) not enough where-with-all to fix such repairs.
THIS IS A PEFECT OPPORTUNITY FOR YOU!!!!
I recently went with my 20 year old son, Mondoman (his nickname) to a city demolition meeting. There were 7 houses being put on the city demolition list and ZERO INVESTORS or REALTORS!!!
Here he is a 20 year old kid, going where supposed “seasoned investors” never show up! (He probably had good mentor) 🙂
He approached a homeowner right after the city gave them a month to clean up the house or the house would get the “big whack”.
He had another house he got from the city demolition list and here are his numbers:
PURCHASE PRICE $75,000.00
REPAIRS $25,000.00
ARV (solds). $165,000.00
Though he is going to swing for the fences and try to sell it for $175,000.00 because his standard for repairs is better than what the neighborhood requires. (He probably had a good mentor 🙂 )
You see, the opportunity at these meetings is RIPE! You have a motivated seller, you have a deadline that has to be met, you have the DECISION MAKER, and you have a captive audience whose property is in disrepair. All the possible positive negotiation tools are right there for you to get that deal!
You just have to attend the meeting.
2ND WAY
The second way to get properties off the city demolition list is to buy these straight from the city. I will discuss this in my next blog post in much greater detail.
Hope you’re learning A LOT!
To your Success!
Armando Montelongo
CEO