Buying groups of properties all at once is a great way to rapidly increase the size of your portfolio. The key, of course, is being able to find, evaluate, and finance such deals.
In the past, we’ve bought portfolios with as many as 97 and 41 houses, but this time I will discuss a more reasonably sized package of nine houses we recently bought and the lessons you can learn from it.
How to Purchase Real Estate With No (or Low) Money!
One of the biggest struggles that many new investors have is in coming up with the money to purchase their first real estate properties. Well, BiggerPockets can help with that too. The Book on Investing in Real Estate with No (and Low) Money Down can give you the tools you need to get started in real estate, even if you don’t have tons of cash lying around.
Finding the Deal
This deal came to us in a very simple manner; a wholesaler emailed it to me. Now, most of the properties I see from wholesalers range from OK to terrible. The portfolios are usually particularly bad, with most of the properties residing in the absolute worst parts of town.
Part of the reason for this is that wholesalers will often develop strong relationships with a couple of end-buyers, and those investors will get to pick over all the deals. So all the good ones get gobbled up, and the one’s that get to you are usually mediocre at best. On that note, it’s a good idea to find the best wholesalers and try to become one of their go-to investors. Take the best one’s out to lunch, and if you do buy a deal from one, try to leverage that into another.
But even though most of the good ones will get snatched up before they land in your inbox, some of the good ones will slip through the cracks. I’ve purchased plenty of properties from wholesalers by simply being on their email lists. While you’ll have to sift through a lot of coal to find a diamond and learn to ignore heavy-handed sales language like “Cash Cow,” or “25 percent cash on cash return,” or “this property will cure cancer,” it’s still worth the effort. After all, all you have to do is get on an email list and check to see if the property and price look reasonable. Most wholesalers will include a lot of pictures, so that can help you do a quick evaluation as well.
When you get an email from a wholesaler with an interesting property, you can bet that a bunch of other people got the same email. In the past for example, when a wholesaler sent me a house that would have been a great deal, I got there right as another investor (who happens to be on BiggerPockets as well) was leaving. As soon as I had finished walking through the house I called and let the wholesaler know I would take it. Unfortunately, the other BiggerPockets investor (who will remain unnamed) had already locked it up.
That’s how fast this…