Upon returning from the college I elected to take on a business partner. Short Sales are one of the most intricate real estate transactions that exist and, while I could have done it on my own, it would have taken much longer than if I had someone partnering with me. RS, therefore, came on board and we began masterminding ways to find short sales, which, in this market, isn't terribly difficult since so many people are in loans they can no longer afford.
We began by contacting a real estate agent friend of mine, Greg, who has been invaluable in sending us properties in our area that are in pre-foreclosure. Our deal with him is if we find a property through him, and negotiate with the bank to buy it at a discount, when we fix it up and prepare to resell it we use Greg as our realtor. This might sound like it took a lot to make it happen but it was actually quite simple. Having already established a relationship with him it took very little convincing for him to meet with us, plus he's getting something out of it.
I would guess that almost everyone knows at least one real estate agent either directly or through a friend; I would encourage you to start with someone you know because it feels more comfortable. As you gain experience you'll want to contact Realtors who work specifically in the area you are buying and build relationships with others who have an excellent performance record i.e. they're selling a lot of homes! A tip a friend in the NR community gave me was to drive around a neighborhood/area in which you are considering buying and look to see which agent's name appears on the most signs. Odds are that person is getting a lot of deals done and thus a valuable asset for your exit strategy.
Another connection I made was with a mortgage broker, Mike, who I actually met in a bar several years ago. A rather drunk woman decided we made a good-looking couple and tried to play Yenta for us. We got along fine but there were no sparks, however we learned we both had an interest in investing so we exchanged information. RS and I met Mike for coffee, explained what we were dong and he agreed to refer clients to us whom he cannot re-finance or do a loan-modification for. In return we agreed to make him our preferred lender to prospective buyers on our fix and flips.
Buildling mutually beneficial relationships is my favorite way to find deals especially because the person referring the short sale to you has likely had contact with the home owner and therefore has put in a good word for you as someone who can a) educate them on their options and b) might be able to buy their house and c) isn't a scheister!
For more info on how I became such a freakin' genius visit: www.newrichbdg.com
Another option, although we have not yet gone down this road, is to hit the courthouse, which has public records of distressed properties. There are also on-line services from which you can buy lists of pre-foreclosure homes in your area. One that my friend Mick likes is www.public-record.com
From that point you can mail letters or go door to door and speak to the home owners in person. I do not recommend talking to the home owners, however, unless you know what the heck you are doing. First, if you are not educated in the different option home owners have before doing a short sale, then you are doing them a diservice. Secondly, if they choose to work with you they are putting a lot of faith in you to provide them a solution. If the bank will not accept a price that make the numbers work on your end, that's one thing, but to work with a homeowner and fail simply becasue you didn't know what you were doing is an entirely different matter.
If you are interested in getting the same education I got visit: www.newrichbdg.com
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