Find a distressed property that is located in an otherwise great neighborhood. Make sure that the rental rates in the area will support the 1% rule! Even if you plan to flip it!
→1% Rule Explained: Quick and dirty method for evaluating a real estate rental deal/market. If the monthly rental rate is at least one percent of the purchase price, then the it is worth exploring further. If the monthly rental rate is less than one percent of the purchase price, I'm better off focusing my efforts elsewhere.
Look for houses with solid bones. Look at the top of the roof and make sure it's straight line and there are no waves or dips. Replacing a roof is not the end of the world but having structural issues can be a pain from start to finish. Examine the exterior of the property and make sure there are no major cracks in the walls or foundation. A property that has solid bones will have perfectly parallel walls that are perpendicular to the floors and ceilings. If you can get into the property, look for the condition of the mechanical and make sure that it has a good floor plan. If you can't get in to the property and you still want to make an offer ASSUME THE WORST.
Send a letter to the property owner saying that you like to buy their house. You can get the address of the property owner by using the MLS system or simply going down to the courthouse and using public records. If the owners address is different than the property's address that means that its owned by an investor and your chances of getting the deal have increased. Investors are much more likely to be able to sell a property than a home owner. In your letter be sure to let the property owner know about any other real estate services that your company provides. Also, let them know that you're interested in any property that they might have. Assuming that you are dealing with an investor it is highly likely that they have multiple houses. This will increase the chances of the property owner giving you a call back.
“Hello my name is Ryan and I would like to buy your property at 1234 Example St. My company Place To Live Rentals buys, sells and leases properties all over Indianapolis. I would be interested in taking a look at any properties that you have for sale in Indy”.
In my letters I also provide an e-mail address, a phone number, my office address and my website.
When I put in a purchase agreement I take into account the amount of rehab that needs to be done on the property, the rental rate of the property and the potential value of that property once it's completely rehabbed.
When I write up the offer I always offer a little less than what I'm willing to take the property for. This way the seller has the chance to counter back and negotiate the purchase price. It's always a good idea to waive the inspection when you write up your offers this let's the seller know that you are serious and you will buy the property and you understand that it is in a distressed condition. I always offer cash and say I can close in about two weeks.