I was comparing residential hard money lenders that service New York investors with my friend, Vince, when a young guy I’d seen around town asked if he could join the conversation. We were talking over breakfast at Old John’s—as we do most days of the week—and were used to this kind of thing happening. This kid, Jerome, was something else, though. Barely out of college, Jerome was eager to start investing in real estate as soon as possible. Already aware of how competitive it can be to invest in any one of the city’s five boroughs, however, he’d made finding the best NYC real estate deals a top priority. And, not surprisingly, he’d hit a big brick wall. So, Vince and I bought the kid a plate of over-medium eggs and a cup of coffee, then gave him some ideas for climbing over that wall.
Common Ways to Find Good Real Estate Deals in NYC
If you’re a new investor, like Jerome, you no doubt already have an inkling that locating and securing inexpensive property to buy, rehab, and resell here is no easy feat. Even if you’ve been investing in New York City for a while, you’ve probably hit your own wall at some point. Investor competition is very strong, which can make the urge to succeed at finding the best deals that much stronger. Our collective competitive nature, however, can get us into trouble when we start letting our emotions determine our property investment decisions. We’ve all been there, too. Part of the learning curve in this industry is buying a house because others are interested or paying too much for one so that others don’t get it. And, I doubt any of us ever listed overpaying on a bad deal anywhere in our real estate investment plan.
The only way to really cut through the competition and find fixer-uppers that few others have found first is to refine your lead-generating strategy. Here are some of the most common ways to do this.
Join investing clubs
New and seasoned investors alike join real estate investing clubs in New York for a variety of reasons and the chance to get some good deals is one of them. In addition, you can create camaraderie with your peers, network with other industry experts, and learn new skills. These opportunities can lead to more deals in the future as you mingle with others who have similar interests as you. Plus, it’s not just real estate investors who can join New York’s investing clubs. Contractors, engineers, attorneys, and real estate agents are all welcome to participate and, sometimes, they do. So, if you join as well, you might connect with some pros who have off-market properties that they can hook you up with.
But, you’ll have to invest a lot of yourself into these clubs before you get anything in return and, even then, you might never get a deal. More often than not, attendance is low at meetings. So, you may have to join several clubs to increase your chances of creating any real connections. And, membership fees can be high, which means just the chance to connect will cost you. Even if you join every club and attend every meeting in town, however, your fellow members are likely to be rookies with either as much, or less, experience than you. So, while you won’t be dealing with a lot of competition, you won’t necessarily be getting a lot of deals, either.
Market to homeowners
Advertising can be a very effective way to reach distressed homeowners and, because not every investor can afford it, this may also cut down on your competition. Everything from direct mailers to TV commercials have the potential to create brand awareness and regularly remind homeowners who they should call when they need to sell fast. And, you can target your marketing efforts to specific areas, like the up and coming neighborhood of Brooklyn’s Bed-Stuy, or cast a broader net by advertising on social media and in the New York Times—whatever works for you and your budget. These days, you have a lot of options for reaching homeowners directly, which potentially gives them many opportunities to reach back to you.
The main problem with this method is the price. To connect with as many distressed homeowners as possible, you will need to advertise as often as possible. And, that could cost you quite a bit of time and money, especially since you’ll be competing against investors who’ve already made a name for themselves online and out in the field. To become a household name, you’ll have to spend the big bucks to make an impression and, then, keep on spending so you won’t be forgotten. Even then, there is no guarantee your efforts will ever pay off. You stand to increase your luck if you join a well-respected real estate investing franchise with an already established campaign.
Use lead lists
Most real estate investors are familiar with lead lists and how they’re designed to provide information about homeowners in a variety of situations, whether good or bad. But, what you may not know is how customizable they can be or that you no longer have to buy them from real estate agents. So, you can actually use these lists to narrow your focus to homeowners who are facing foreclosure, don’t pay their taxes, or are getting a divorce, and then contact them directly. You can also access a host of lead list vendors just by going online. It’s easier than ever to find out who’s in financial distress and may want to sell their house fast. Since investing in real estate in New York is already hard work, the simpler you can make your search for good deals, the better off your bottom line will be.
Unfortunately, using lead lists to find homeowners in distress can complicate matters. Yes, it’s better to contact a struggling Brooklyn homeowner before they lose their house to the King’s County foreclosure real estate auction. But, when they realize their troubles aren’t private, they may actually resist selling their home to you—especially if several other investors contacted them first. And, because lead lists are available to anyone, you will very likely have some competition. It’s also hard to maintain updated lists since not every change gets reported, or recorded, about a homeowner’s situation by the time you pick up the phone. That just makes it easy to stick your foot in your mouth when a homeowner who is now current on their mortgage answers your call—and, hangs up.
Whether you’ve already started buying houses to renovate and sell or have only just begun crafting your business plan for flipping houses, you probably recognize one or more of the strategies for finding deals above. But, there is one method that is a little less common and a lot more effective. To increase your chances of successfully investing in real estate, you might want to familiarize yourself with that one, too.
Gaining the Edge When Looking for NYC Real Estate Deals
If there is one thing I’ve learned from working as a real estate investor in New York it’s that cooking an over-medium egg is hard to do. So, when you find a local joint that doesn’t overcook the yoke, you tend to stick with it—no matter how many other restaurants list it on the menu and occasionally fry the egg right. I feel that way about qualified lead-generating strategies, too. When you discover one that consistently finds deals that you don’t have to compete for, and that has a high rate of conversion, you know you’ve found something special. And, while other methods may occasionally work, you rarely want to waste the effort on them.
For me, that method is the HomeVestors®’ “We Buy Ugly Houses®” marketing campaign. I’m sure you’ve seen the ads on TV and billboards, maybe even heard them on the radio—they’re everywhere. And, it’s because they’re everywhere that they are so successful at reaching distressed homeowners who need to sell their houses fast. As an independently owned and operated HomeVestors® franchisee who has access to this tried-and-true campaign, New York City homeowners who are in search of “solutions for ugly situations®” call me. So, I don’t have to bother with buying lead lists or attending network events unless I want to. But, why would I when I already have an edge over the competition and an influx of qualified leads?
If you’ve hit a brick wall, like Jerome, with finding qualified leads, contact HomeVestors to learn how to gain access to the “We Buy Ugly Houses®” marketing campaign today!
Each franchise office is independently owned and operated.
HomeVestors of America® is the nation’s only real estate investing franchise, providing business opportunities to real estate and investment professionals across the nation.