8+ Ways to Find Your First or Next Rental Property in 2027

27:07I want to be like, hey, I'm an investor. I've been investing for three years now. I'm looking to get my third deal. I want to buy a duplex. I would just keep it as. All right. Number four, which is somewhat related to word of mouth, but it's pocket listings and agent relationships. So a pocket listing is slightly different than just like a word of mouth transaction. Like a pocket listing is actually coming from an agent. But it just means that they haven't actually published it live for the entire world to see. So sometimes an agent might keep a pocket listing because they're like, hey, I know if I list this one, it's just not going to go well.

27:43So I've got you here. Sometimes they have a pocket listing because they just haven't actually listed it yet. And maybe they just signed the contract with the seller today and you're there and they're like, actually, I think I might be able to sell this without us even going to market and doing the whole rigmarole of listing it, right? So there's oftentimes a benefit for the agents as well, but a pocket listing means that it's an agent's actual listing, but before they mass market on the MLS, they're going to a select number of people they trust first say, hey, do you actually want first dibs on this deal?

28:15It's great for someone who obviously has relationships with those agents already and that it takes time to build. And it's great for someone that's got the ability to move quickly, the ability to confidently close. Because a lot of times when an agent is giving you a pocket listing, part of the reason they're doing that is because they want certainty of close, right? It's like, hey, this is a deal that like traditional financing isn't going to work with, right? So I got to make sure I take this to someone that actually has the funds to get it closed. And hey, I've done 10 deals to Ash. She always gets it to the finish line.

28:44Let me go take it to her to make sure that this transaction gets done and I take care of my seller, right? So it's for someone who has that certainty of their ability to actually close in that transaction. And even if you're a rookie investor, it doesn't mean that you can't have that certainty. But either A, you've got the funds, maybe you're pulling on HELOC, maybe you've got your partner with someone else, you just got the cash ready. But being able to quickly close, I feel like will be one of those barriers that you have to tackle. But the advantages here is much like the word of mouth is that you're getting access to a deal without fighting a bunch of other potential investors.

29:16And because these are agents who solicit homeowners for a living, it tends to be a more consistent pipeline of deals coming your way. And there are real estate investors out there who the majority of their deal flow comes from agent relationships. In fact, I have a buddy, his name's Brian Davila. He's based out of Vegas. And his entire wholesaling operation is really based not on going after homeowners, but on going after agents and trying to get access to their pocket listings. That's his entire strategy for wholesaling. So you can really build a meaningful deal pipeline out of this strategy by itself.

29:53I've actually got a lot of pocket listings too as part of my portfolio. And a lot of, well, the majority I would say were estates where they went to an agent, they wanted to sell it. The houses are full of stuff. They need repairs. And so the agent says, well, I know Ashley, would you like her to take a look at it? and then I come in look at the property and things like that so it's usually people who are looking for you know they don't want to have to go through showings and getting the property show ready and they would rather just get it done and over with like you know they're grieving because they've lost someone so those are been the majority of been estates I think there was maybe a couple other ones at Warren Estates.

30:44I don't remember exactly what the reasoning was why those were kind of like pocket listings done. But most of the time it's because they're not like turnkey properties. They're not beautiful properties that are going to command way above market listing. So if they're priced right or whatever, I will buy a pocket listing. There are like some rules around pocket listings for agents though. When a property is officially marketed to the public, you have to list it on the MLS within one day or something like that. I really don't know these rules, but there is something like that too. So you are a newer agent and you haven't heard about pocket listings and you maybe want to build a buyer's list of investors and make sure that you're aware of what the rules are for pocket listings so that you're following them.

31:37I'm sure your broker can guide you. I think the only thing that I'd add to the strategy is that if you do want to get good at getting more pocket listings sent your way, just spend time talking to more agents. You know, my buddy Brian, who I mentioned, like he literally has a team of people who just cold call agents all day and say like, hey, here's who we are. Here's what our buy box is. Here's what we're looking for. Here's how many deals we close in a monthly basis. Like we'd love to get on your list of pocket listings, right? So that's one approach. But obviously, if you're not doing that level of volume, it's clarity on the buy box, which was step number one.

32:08And then just doing your own outreach to those agents say, hey, if you find something, just know I'd be a willing participant to take a look at that deal, right? And build those relationships. Strategy number five is working with wholesalers. Wholesalers for folks that aren't aware, you can think of them as professional deal finders, ideally professional deal finders, but that's the role they're supposed to serve. So wholesalers basically, through different marketing channels, generate leads of people who are looking to sell their homes below market value. Sometimes those marketing channels are ads on television and radio.

32:50Sometimes that's ads on Facebook and Instagram and Google. Sometimes it's direct mail. Sometimes it's door knocking, it's cold calling. They all specialize in different strategies, but the end result is they get a homeowner who's willing to sell their property at a discount. And sometimes, most of the time, it's because the property's in distress, needs a lot of repairs. Sometimes the seller's in distress. They've got a divorce, they need to sell quickly. Someone passed away, they don't wanna deal with it. They've got to, you know, they're packing up and moving across the country for a new job and they have to close quickly.

33:25So either the property or the seller are in distress. And the way that wholesalers make money is that they talk to the seller. They place the property under contract at one price. And then they resell that property to you at a higher price. So maybe they're under contract at$200 ,000. They resell that contract to you for$250 ,000. they get to keep that difference of 50K, right? That's how a wholesaler makes their money. So that's what wholesalers do. The advantages of working with the wholesaler is that they're doing all the hard work to go source the deals. Like you just have to make the relationships.

34:05They've already done all the hard work to make the deals, right? So it's not nearly as consistent as what you're going to see on the MLS. I don't think anything matches the MLS in terms of volume, but it's more consistent if you have a big enough roster of wholesalers. like where you can get deals sent to you every day. This was like several years ago where I joined like a, I went into like a bunch of different Facebook groups in the areas that I'm looking to invest. And I'm pulling my phone here because I'm probably still like every single day. But I put my buy box in a bunch of Facebook groups saying, hey, here's who I am.

34:35Here's what my buy box is. Wholesalers send me your deal. And every single day, I just pulled this up. Literally every single day, there's like five to seven emails in my inbox of properties that I could go buy, right? Right. So there's enough wholesalers out there to put on your market to keep you steadily kind of looking at deals and analyzing things. Some of the negatives are that you have to usually close quickly. A lot of times you have to pay cash for the property. You can't really rely on the numbers that the wholesaler is giving you. A lot of wholesalers will tell you what the rehab cost will be and what the ARV will be the after repair value on the property.

35:15A lot of times these are not accurate because once again, they are trying to offload the property, sell the property and make a nice assignment fee on it. So you have to do your own due diligence and you have to do your own estimates on the property. Also, you should be aware of different rules, laws and regulations around wholesaling in your states specifically. Tony, are there some, there are some states, right, that have completely outlawed wholesaling, correct? You know, I'm not a wholesaler myself, but I believe so. And I believe there's even maybe more states that have, like you have to have a license now to wholesale, whereas before you didn't have to be a licensed agent.

35:57But there are states that are moving towards like, you've got to have your license the same way that a realtor would. So definitely check the local laws and regulations for your state? I just looked it up and it says it's not completely illegal, but heavily restricted or regulated in some states. So it's getting tricky, right? So it's trickier out there for wholesalers these days, but they're adapting, they're figuring it out and they're still out there in full force. So again, check your state, see how restrictive it is, but wholesalers could be a great way to find the right deals. Here's the bad news.

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37:55Waking up early, walking somewhere I've never been, finding a little cafe with no plan except to see what the day brings. A few days to explore, try new restaurants, smell the salt and citrus in the air, and remember why we left to travel in the first place. That feeling of being somewhere completely new, that's what keeps me chasing the next trip. But here's what makes it even better. While I'm away, my place doesn't have to just sit there. I can list my space on Airbnb and bring in a little extra cash while I'm off exploring. And with the co-host network, I don't have to think twice about it.

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41:49If you're ready to hear the of your first sale today, head over to shopify.com slash rookie to start your free trial today. That's shopify.com slash rookie. Okay, now on to number six, direct to owner and off market outreach. So I haven't done a lot of this, but this is where you are going directly to the seller. You are going to find your own leads. You are going to find your own sellers. And this can be done by sending text messages. This can be done by writing letters, doing a mail campaign. This can be by calling people and asking if they're, you know, want to sell their house. So this could be door knocking even.

42:35So this is where you're cutting out the wholesalers, you're cutting out agents, cutting out any middleman, and you are going direct to the potential seller. So you have to do the work. You have to do the mail campaign. You have to set up usually like a service where you can blast out text messages, but you have to follow again, rules, laws, and regulations against spamming people. The same with phone calls. You You can do skip tracing to get the phone numbers of people that kind of fit your buy box, get the numbers for the property owners and, you know, do like robo calling and have it. You can outsource to a call center or you can make the calls yourself.

43:19It recently even has AI agents that will do the calls for you, too. But some of the benefits of doing these is you're cutting out the middleman's. You're not paying a commission. You're not paying an assignment fee. So there's more room to make a better price because you don't have to account for those things to be taken off the top. One huge advantage I think with this is that you are getting direct to the seller to be able to negotiate. Sometimes it is nice to have a middleman, but also you're playing telephone. You're playing telephone with from me to my agent to their agent to them. In New York State, then there's attorneys involved even.

44:00And then it's even another additional layer of somebody that you're playing telephone with. And it's going from person to person to person to person. And things can get easily miscommunicated. One example I always think about is seller financing and explaining to someone the tax advantages of that. Like I don't get to say when I'm working through agents really if the seller's agent doesn't understand seller financing or doesn't understand seller credits or doesn't understand something I'm trying to negotiate into the deal, most likely they are not going to explain it correctly to their buyer. they're not going to be an advocate for the buyer to accept this.

44:42So that is one advantage. You get to be face-to-face with the person. And then also too, that you kind of cut out the middleman and then you're also cutting out those expenses like the commission or assignment fee. In terms of the drawbacks, there are a few big things that come to mind for you. Number one is that this isn't like an instant kind of spigot that turns on for you, right? So we talked about MLS, I can literally open up my phone at any point in any time of the day and go find a bunch of deals to go look at. When you're doing your own direct outreach, there's usually a long kind of warmup period before you can actually get to a point where deals start closing for you.

45:20And some of the folks that we talk to that go off market direct to seller, it's six months. James Zaner talks about how he knocked doors for like a year before he got his first off market deal, right? So it just takes time to build that flywheel. So if you need a deal like today, typically this isn't going to be the best approach. Second is that to Ashley's point, you have to make sure that you're following all the rules and regulations as it relates to outreach. If you're texting people, there are guidelines around, I think it's called TCPA, where you have to make sure that you're following those guidelines.

45:54I'm sure different states have different rules around mail and what does that look like? And if you're calling people, so you've got to make sure you're on top of what those look like for your for your local city state and and otherwise and then I think that maybe the bigger downside that is maybe a little hidden is that depending on how good you are at this it could actually end up costing you more like a lot of people want to go direct to seller because they feel it's going to give them the best deal and oftentimes that can be true but let's say that you're really really bad at direct mail Let's say that you're really, really bad at selling people on the phone or those face-to-face conversations.

46:32And you've got a really, really low conversion rate of, hey, we send out X number of mailers and we get back this response. If your response rate is really, really low because you're not good at it, you might end up spending more money on mailers and time and all those different things than if you would have just paid the wholesaler an assignment fee. So you've got to make sure that if you are going to go down this path of going direct to sellers, you've got the skill set and the proper training to execute on it to actually make it a cost-effective model for you. Now let's look at number seven, retiring landlords.

47:06And I bought a portfolio from a retiring landlord before. And one of the big advantages of this is that if they have a smaller portfolio, it is way easier for them to retire by selling one person their whole portfolio, or at least a large chunk of it than having to individually sell each single property to different people and having to do a ton of different transactions, a ton of different showings. So that's just like one advantage for them even, but also for you to be able to buy a portfolio and buy multiple properties in one transaction compared to having to go out and do all these separate transactions to try to build up your portfolio.

47:55This is more common for long-term rentals than I would say short-term rentals. But hey, who knows when Tony's getting time to retire, he might offload all of those Joshua Tree properties that someone can snatch up a whole bunch of them. But I would say more common small multifamily properties and long-term rentals, especially with boomers retiring, that there may be lots of opportunity out there. And I will say that it probably is not very common for boomers to have huge short-term rental portfolios that they've owned for a long period of time, maybe lake houses or maybe different vacation properties like that.

48:36But it wasn't as popular, I would say, as it is now. And long-term rentals, they could have held for like 30 years where you're looking at advantages of they have no debt on the property for holding it for so long. They are going to pay a ton in taxes if they just sell the property and pay capital gains on that. And then also they have the opportunity to most likely do some kind of creative financing like seller financing where they don't absolutely need a lump sum of cash up front maybe and you could they can be the bank do the seller financing that also offsets their tax burden and lowers their tax bill so there's benefits to both sides of that but that's one thing i love about the retiring landlord is usually there's a lot more room for opportunity in how you finance the deal and getting creative with it.

49:37Like the portfolio that I bought, I bought some at once, some were cash, some were I used a line of credit and then the other, the rest were seller financing. And then two years later I bought the rest of the portfolio. So it wasn't even like I had to do it all at once too. So that's just like some examples of how you are able to get these portfolios from retiring landlords. Yeah. Just the only disadvantage, and I've personally ever purchased from, you know, like a large portfolio from a retiring landlord, but I did get pretty deep into conversation when we were investing in Shreveport, this wonderful woman named Mary.

50:17And we had a long conversation about her portfolio, but the reasons I didn't move forward with it was because, really I guess there were a few reasons. Number one, deferred maintenance. Number two, really, really poor kind of bookkeeping and record keeping to confirm some of the actual revenues and expenses. And they were just still asking a little bit too much given what that was. So obviously the rents were low. So I had the opportunity to like bring them up to market level. but because there was so much deferred maintenance, it was going to be a really big capital expense to get all these properties to the point where I could actually increase the rents.

50:55Right. And when I balanced those two things out against what they were asking for, it just didn't work for me. So I think that's the only disadvantage. You really want to complete your due diligence to ensure that the asking price allows you to still execute the business plan and get the rents where they need to be, which is true of any underwriting or any property that you're looking at. But that was a disadvantage I saw from you as given that you've done this a few times and anything that we're not considering? I would say maybe the only, no, I don't think so. All right. And the final one here, number eight, Ash and I are just going to rattle off a few kind of like bonus channels that maybe you hadn't considered that you can go take a look at.

51:32So one is HUD owned and Fannie Mae home path properties. So if HUD or Fannie Mae have to take back properties or they get control of properties for whatever reason, you can actually go bid on those properties. Now, don't quote me here because I've never purchased through those programs, but I want to say that they have like a timeline where it has to be someone who's buying for their personal property first. And then after that timeline, then investors can go in afterwards. Ash, do you recall that? Does that sound familiar to you? Yeah. They usually open up first to if it's going to be your primary residence to a certain amount of window.

52:10If they don't get like any offers or like accepted offers that they don't accept any of them. Then after that window closes, they open up to investors. And still, if it's going to be your primary home, you still can bid on it and look at it. But they do give that time for just primary residents to be able to submit offers to not have to compete with investors. Okay. So the next thing is local banks and actually going and talking to the loan officers at that banks and seeing if they are actually foreclosing on any properties or if they know of anyone that maybe wants to sell their property. But building those relationships with people who deal with real estate investors or deal with homeowners, so loan officers, but also like property managers, so property management companies in the area, they're usually one of the first to know that an owner is going to sell their property if they manage that property.

53:09And sometimes they will like kind of keep the house in sale because then they'll know that they are keeping the property. But if you can get on their list to be notified when they have a property that they're selling for an owner too, that's an advantage. Going to investor meetups, going in the BiggerPockets forums and just saying, hey, I'm looking to buy a property in this area, searching where other people are investing if maybe you need to find a new market. And then local online groups. So Facebook groups, um, connecting with people on Instagram that are investing in your market. Um, and then there's also auctions and tax sales.

53:51Um, so like the marshals, the U S marshals, they seize land and then they have auctions to sell it. I actually went to one before and it was really interesting. And the guy that I went with actually ended up buying the piece of land. He was the only person bidding. So they got it exactly what it was, but it was like a prime piece of property. But they only notify the people who have the adjoining land. They send them a letter and just saying, hey, just, you know, this parcel of land that is adjacent to your property is going to be sold at auction. Here's the date. Here's where you need to be if you are interested or whatever.

54:25And then I think you sign up in advance as a bidder. But there's a ton of different like government entities that do different auctions. There was one by my lake house recently it was just a small parcel of land and it was listed because it backed taxes the person hadn't paid the taxes on it and it was being put up for auction it was just an online auction you know up there and they do it once a year and you just sign in you register to bid and then you can bid on any of the properties so there are different um you know i would just go into to Claude ChatGPT and like ask in my area, what are some of the properties that are for sale?

55:07But you could actually find a lot of these tax auction websites just from using AI in your area. Last thing that we'll wrap up here, guys, is that we gave you a bunch of different strategies, but none of this actually helps if you don't execute on what we've talked about. And I'm a big fan of like tracking things and like data provides clarity and you can make the right move based on the right data. So if I'm a rookie sitting in this seat and I haven't yet closed my first deal, the things that I will be tracking are one, just did you complete your buy box? Yes or no, right? But once you have your buy box complete, how many deals have you analyzed in a rolling 30 day period?

55:50And the goal is to never let that number get below at least one per day. Right? And if you can do that, analyzing the deal every day for 30 days straight, that meets your buy box, there's a really, really good chance you're going to find at least one or two properties that are worth really, really pulling the trigger on. And I know that because I've seen it happen time and time and time again. So that would be my challenge to you guys is dedicate and focus yourself to one deal analyze that meets your specific buy box every day for the next 30 days. And we want you guys to track this. So you're going to track your new leads.

56:28You're going to track the amount of properties that you are analyzed if that ends up being once a week. You're going to track your offer submitted and you're going to actually track follow-ups. So how often are you following up on a property? When did you follow up? Did you follow up? And then any contracts and closing. So you can use a project management board to track this. You can use a Google worksheet, whatever you want, pen and paper to track this. Thank you guys so much for joining us today. And I hope that you will look into some of these ways that you can find deals in 2027 or start this year.

57:06Take Tony's advice and start analyzing, analyzing, analyzing, and it's just going to make you more comfortable and better and help you get over that analysis paralysis. I'm Ashley. He's Tony. And this has been an episode of Real Estate Rookie. Make sure are subscribed to our YouTube channel. And if you haven't already check out a biggerpockets.com. We'll see you guys next time.