Jason Lucchesi shares a fantastic way to find distressed deals through RealtyTrac. Learn how he searches and find short sales with a good amount of equity.
Not only does Jason share how to find distressed deals by using RealtyTrac, he also shares what to do when you’re ready to let the buyers know you’re interested.
Mike: Welcome back to the flipnerd.com REI classroom, where experts from across the real estate investing industry teach you quick lessons to take your business to the next level. And now, let’s meet today’s expert host.Jason: Hey there, everyone. It’s Jason Lucchese with jasonlucchese.com. I am your host today in the REI Classroom. Today, we’re going to be discussing how to find distressed properties with tons of equity using RealtyTrac.
Mike: This REI Classroom real estate lesson is sponsored by Flipnerd Investor Coaching, your blueprint to investing success.
Jason: Now, I don’t know how many of you are using RealtyTrac at this very moment, but it’s a great tool that you can use. And I don’t have any affiliation with them. There’s no affiliate link in this video. I am just bringing to you this information because there are not a lot of people using this. And quite frankly, a lot of people probably could be using this to find some really great deals.
Now, here’s what I want to discuss with you. Now, on RealtyTrac, you could go on there. You could look at the properties that they have for foreclosures, proof foreclosures, REOs, upcoming auctions. You can find a bunch of great deals on there. Yes, some of them are probably listed so they’re not typically going to be off-market deals. But the deals I want to talk to you about that you can find on RealtyTrac right now that have equity in them and they’re in a distressed state are short sales.
Okay. Now when we hear short sales, we think, “Oh, my goodness. It’s going to take three, six, maybe 12 months to get a deal closed.” That’s not the case with these types of the deals. So what I mean by that is when you go into the search engine box on RealtyTrac, the cool thing is you could put in the county that you’re looking to buy. And so like, for me, we’re buying all over the country right now. But if I wanted to zone in just on Indianapolis, I would look for Marion and Hamilton counties.
And let’s just go with Marion County for right now. So Marion County, let’s just say it pulls up you know 500 properties within the RealtyTrac. RealtyTrac pulls up that there are 500 plus properties that are in a pre-foreclosure state so that means it’s a short sale. The cool thing that you could do is you could target it down to what type of properties you’re looking for.
So what I always do, especially if I’m trying to quickly flip the deal, I always want to understand what my cash buyers are looking for so I could just quickly flip it without using any of my own capital. So I’ll put in three bedrooms, one bath and it typically will start narrowing it down to where I only want to see the properties that I want. And then from there, the cool thing is you could put down how much equity you want to see in these properties. You could put 0% to 50%, and it will start pulling up that data for you.
Now, the cool thing is you can start looking at these properties and you have to do your due diligence. You have to do your due diligence. So you have to look at these properties. It will pull it up on the web page, you click on them and make sure you’re doing your due diligence as far as an evaluation standpoint. It will tell you the mortgage balance. It will tell you who the attorney is that is filing the foreclosure. Now, the best way to go about these leads is contacting the homeowners directly. You could do a door knock. You can use a skip tracing service like TLO, and you can contact the individuals over the phone. That’s what we do. We contact these homeowners by the phone, we let them know, “Hey, we’re interested in purchasing your property. Are you interested in selling?”
Now, I know for the time constraints of this video, we could obviously explore that so much more. But it’s a simple conversation that you have with the homeowner to get that going. Now, most of these homeowners, let’s just say the home is worth $100,000. And they may owe $30,000, but they do not know what to do. So many people are misled from their banks, saying, “Hey, we’re working out a loan modification for you or a principal loan reduction for you.”
And they’re really not. They might be, but the whole time, the foreclosure is still going through the process. It’s still going through, either if you’re in a state that has a lis pendens or a notice of default, the bank never stops the foreclosure process. So you talk to them, you let them know that. You let them know what you can do, “Hey, I could pay off the mortgage. I could pay that off for you right now.”
Then just spark a conversation. “What are you looking to get out of the property as of right now? I can make you an offer right on the spot.” They may say, “You know what? We want $40,000.” They owe $30,000. Maybe they need some moving expense money. Maybe they need some money so that they could have a few months rent backed up. Give it to them. We’re talking about you getting a property at 40% of what the fair market value is saying it’s worth.
And you can get that data off Zillow, you can get that data off the MLS when I’m talking about sold data. So if you have a property that’s worth $100,000, maybe if you know there’s $10,000 grand worth of work in there, you could quickly flip that and make a quick $10,000, $15,000 in pure profit. And then the cool thing is you pay that off. They don’t have to worry about getting kicked out of the house through a share sale.
That’s the worst that you would want any other individual to see. So I highly recommend you use that. Go on to RealtyTrac, start fiddling around with it. It’s free. Start fiddling around with the account. If you want to upgrade, you can. Again, there’s no affiliation here. We don’t have an affiliate link on this page. But if you’d like further information on this topic or anything else, just let me know. Visit jasonlucchese.com and I’ll be more than happy to help you. Thanks for attending this session of REI Classroom. Have a great day. Talk to you soon. Bye now.
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