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How to Find Investment Properties on Your Own

property search apps

Summary: Many investors who are just starting out assume that real estate agents are the only source of deals. The truth is that it’s also possible to find deals yourself utilizing the free online resources described in detail in this guide. In this post, we provide an overview of useful online property sites and search apps. We’ll discuss how to best use them so you can dive right in and start finding great deals yourself today.

 

Many people starting out in real estate investing assume that their real estate agent will be the source of all of their deals. This is is not the case at all.

While your agent will likely bring you the majority of your deals, you can actually be a great source of deals with just a little daily time and effort. When we think about our own portfolio, for example, we found about one out of every four properties on our own using the online resources described below.

In this blog post, we provide you with some helpful tips for finding properties on your own using the same online resources that we use. We also provide a step-by-step guide of how to best utilize these online resources to gather the information you need to understand the value proposition of a property. By the time you’re done reading, you should be comfortable navigating property search apps on your own and identifying the hidden details that typically make or break a property.  

 

Property Search Apps

 

Redfin

Redfin is the app we use most because it has the most accurate and up-to-date information. We also find the layout easiest to navigate, and it usually has most of the information you need to plug into your cash-on-cash (COC) calculator (scroll to the bottom of the article for a free download or join our Facebook Community to download the calculator). Because of this, many of the screenshots in the how to use property search apps section below will be from Redfin. The downside of Redfin is that it isn’t available in all markets.

 

Trulia

Trulia is a close second for us because it covers smaller cities that Redfin does not (for example, Spokane) and because it has some great features (especially the crime map and the “What Locals Say” section) that Redfin does not. When you have a property you’re interested in pursuing, at the very least, consider cross-referencing it in Trulia to see the frequency of crimes in the area and types of crimes committed there most recently.

 

Zillow

Zillow is a distant third. We sometimes use Zillow to check out properties, but I can’t say it offers any additional features above Redfin and Trulia. Also, the Zestimate is generally not accurate for rental properties. That being said, if you’re looking at an off-market deal that it isn’t listed in Redfin or Trulia, you may have luck finding some information or pictures on Zillow.

 

Other Useful Resources

For additional information about a property, some cities have local online resources that can be very useful. We were recently introduced to MapsSpokane, for example, where the city provides detailed information about every property, including zoning, locations of sewer and water lines, owner information, tax information, trash pick-up days, schools and a host of other information. When you’ve decided where you want to invest, consider spending some time searching for available local resources.

There are a host of other apps, not explored in detail in this post, that are useful for determining expected rents. Consider checking out Rentometer, Hotpads and Zillow Rentals for this type of information.

 

How to Use Property Search Apps

Now let’s look at some of the most useful features when you’re examining a property online or on a search app. Note that most of these screenshots are from Redfin, however, I’ve included some from Trulia as well. The point of this section is to show you the features that I use whenever I check out a potential investment property and to share some not-so-obvious pearls of information you can glean from them.

 

Setting up filters

property search appsThe first thing you want to do before you even start looking at properties is to set up the filters. In Redfin, this is accomplished by clicking in the top left hand corner under Filters and then selecting at least a maximum Price and the Property Type. You may also want to consider choosing a minimum number of Beds if you want to find larger properties. I usually don’t go much beyond these three selections because I want to see a broad range of deals. My most common search is price<$500,000, a minimum of four bedrooms and multi-family (see screenshot).

If you have some time to do multiple searches, I encourage you to use different filters, because sometimes you can find properties that are mislabeled or are attractive to you even though they may not fit your exact search criteria. For example, I often change my search to include single family houses only under $200,000 that have a minimum of four or five bedrooms. This allows me to occasionally find properties that 1) are actually multi-family, but were mislabeled by the agent, 2) could be converted into multi-family and 3) are single family homes that could be used for supported living, which pays by the bedroom. Another potential search option is filtering by price per square foot or by lot size. This might provide opportunities to uncover properties with hidden value. 

Note that if you click at the top of the page to save the search, you can also get new property alerts based on the filters you set. This is a good idea especially on Redfin, since a study done comparing property notification speeds in 20 markets nationwide showed that Redfin notified customers of the availability of a new property on average three hours faster than Zillow and 18 hours faster than Trulia.

Being the first person to know about a newly-listed property can make a big difference. For example, I saw a new fourplex in Arlington, WA pop up on Redfin just before we were scheduled to tour our rehab project down the road from it. Because I mentioned that new property listing to my agent that morning, we were able to walk directly over to the property, tour it and lock up immediately. I don’t think it was even on market more than three or four hours. And this is not the only example I have. The moral of the story: you want to be the first person to know about a new property listing.

 

How to Do the Deep Dive

Let’s examine a random property in Nashville on multiple apps to see all the different features you should pay attention to when examining an attractive property.

Starting from the top of the page in Redfin:

  • Look at all of the pictures. Pay special attention to things that may need repair such as the roof, any siding issues, peeling paint, kitchen cabinets, flooring. 
  • Look for hidden value like detached garages, storage areas, unfinished areas in the house, over-sized lots.
  • If there aren’t any pictures of inside the building, it may be an indication of bad renters. This is not always the case (sometimes the owner just doesn’t want the renter to know the place is for sale). If the owner has bad renters, he/she may be more motivated to sell the property quickly. That’s a good thing for you, because sometimes you can stipulate in the contract that particularly problematic renters be out of the building prior to you taking possession so you don’t have to deal with evictions or other issues.
  • Pay attention to the total square footage of the property (if a house or unit is >1200 square feet and has two bedrooms, you might be able to add a third bedroom).
  • Look for unfinished square footage where you might be able to add more livable area (this may be down in the “property information” section too).
  • Use street view to check out the neighborhood.

  • Use the satellite map view to look at the surrounding area for parks (bonus for renters with kids), any industrial areas/factories (downside), shopping centers (nice to have several blocks away, not next door), highways (to help with commuting renters), and universities (student renters). When you’re on the satellite view, also check out the plot size to see if there’s extra land you could consider building on or sub-dividing off to sell separately.
  • Look at the Price/Sq Ft and start familiarizing with an average figure in your area (you can even add it as a filter if you want).
  • Check out the days on Redfin – what you may or may not be able to negotiate in a price reduction is pretty dependent on the market, but if the property has been listed for more than a couple weeks without a recent price reduction, you know you may have room to get the price lowered.
  • See what type of property it is (multi-family, single family home, etc.). Sometimes you’ll find a property that looks like a duplex but is still zoned as a single family home. You may be able to find that information here (or sometimes it’s in the description of the property too).
  • Look at the year the property was built. If it was built in the last 10-15 years, you’re probably going to pay a premium for it in most markets, but you’ll likely have less maintenance issues as well, and you certainly won’t be dealing with lead paint!

property search apps

  • Open the Show Full Details section. Sometimes this will contain all the information you need for the COC calculator. Unfortunately, in some cases, the owner will not put in all of the rents, so you’ll have to reach out to your agent for this information. Another important piece of information sometimes contained in here is the square footage of each of the units. Pay attention to these as sometimes tiny units can be difficult to rent (<500 ft).
  • Check out the utility information if there is any. You’re looking to see if the units are separately metered and who pays the utilities, the tenants or the owners.
  • Look at the total expenses and then put them into your COC worksheet.
  • Take note of the water source (you will have less monthly water costs if you have a well and septic, for example, but you’ll have a lot more maintenance costs). We prefer city water because sometimes you can pass that cost off to the renters whereas, you’re never going to be able to charge your renters for emptying the septic or putting in a new leach field!
  • Record the taxes into your COC spreadsheet. Understand that these will likely be higher if you purchase the property at a higher price than the last owner did.
  • Put the unit rents into your COC calculator. Note if two units of the same size and configuration are renting for different amounts. If this is the case, you’ll probably be able to get the lower rented one up to at least the same rents as the other unit once you buy the property. Keep in mind units in the basement may not be as desirable even if they are the same square feet and floor plan.
  • Read the description of the property – look for information about zoning or anything about the bedrooms not actually meeting requirements to be bedrooms (i.e. no closets or no egress windows).
  • Scroll down to the property history section to see when and how much the price has been changed. This is probably one of the most useful areas because it can tell you how motivated the seller is, give you some indication of if the property has major issues and give you a sense of it is appropriately priced.
  • You can tell how motivated the seller is by looking at how rapidly and how aggressively he/she is lowering the price. If the price drops by 20K every two weeks on the dot, it is a much better indicator of a motivated seller than if each drop is 20K infrequently and randomly. Also note if the seller had to delist a property (this means it was on the MLS for a long time with no activity). Sometimes you’ll see a seller listing and delisting a property over the course of one or two years – then you either have a motivated seller or a lazy seller who just wants to see if he/she can get a good price.
  • The property history may give you a sense of if a property has issues because you can see how frequently a property goes “pending” and then is relisted. If that happens a few times, it’s possible that something was found on inspection and that the seller was unwilling to negotiate or whatever was found was so egregious that the potential buyer walked away. Of course, the best case scenario is that the property is relisted because the buyer’s financing fell through. If this is the case, you now have an anxious buyer who is eager to sell – and scared of the next deal falling through, so you can take advantage of it. The key here is to have your real estate agent reach out to the other side’s agent to find out why previous contracts fell through so you have more information to determine the best course of action.
  • Finally, the property history can give you an indication of if the property is competitively priced, because if it goes pending quickly after it’s put on market (or after being relisted), that means investors are moving quickly to snatch it off market, so it could be a good value.

  • Examine the school rankings. If you have higher ranked schools, it will be easier to attract and keep families. If your potential property is all studios or one bedrooms, this may be less important.
  • Take a quick look at the Public Facts sections to see if the number of beds or baths don’t match with what you’ve already learned about the property. If there are more beds or baths, this could indicate that un-permitted additions were made to the property.
  • Notice the lot size – sometimes you might be able to build depending on the zoning. Usually this will be mentioned in the descriptor of the property since the seller will want to advertise extra land.
  • Make note of the walk score. A higher score denotes the ability to walk to shops, grocery stores and other amenities. A high walk score is a nice feature – but most often these types of properties come with a higher price and lower cashflow. However, a high walk score is particularly important if you’re considering turning your property into a short term rental and may be worth the additional markup.
  • Now let’s head to Trulia to get the crime score and check out the descriptions of all the crimes that have recently occurred in the area. Assaults are obviously more concerning than petty-crime or mail theft!
  • Finally, check out Trulia’s “What Locals Say” section to see if there is any useful information about the neighborhood.

After you’ve done all this research online, if you are still interested in the property, make sure you get your COC calculator completed (so you know it is a good deal) and then reach out to agent to discuss the property and/or to get any of the necessary information not included online to calculate your COC return.

 

Besides the Apps: Other Ways to Find Deals

 

In addition to searching the MLS for investment deals yourself online and waiting on your real estate agent to bring you properties, another way to find deals is to build a network beyond just your agent to funnel you off-market deals. You can do this by networking with other agents, with wholesalers and with even your property manager. We’ll delve into off-market deals and how to secure them in detail in a future post.

 

Download and Start Using the Apps Now

 

In summary, one key to recognizing a good real estate investment deal and finding deals yourself is to spend significant time reviewing listings online on the MLS. It’s only once you’ve gone through hundreds or maybe thousands of listings that you can start immediately recognizing good properties and acting quickly without hesitation, locking up deals. So, if you’re just starting out in real estate investing (or even if you’re a seasoned investor searching for another acquisition yourself), download the apps and start finding and securing your next investment now.

 

Action Plan

  1. Download Redfin, Trulia and Zillow and start searching for properties
  2. Use Rentometer and other rental apps to determine what rents should be for a property (remember to use your property manager too!)
  3. Put the numbers you’ve gathered into your COC calculator to decide if a particular property is a good deal (remember to take into account areas of hidden value)
  4. Bring deals that you’ve found to your agents to get more information and to lock them up
Download the Cash-on-Cash Calculator

Do you want to learn how to creatively fund your real estate portfolio and achieve financial freedom? Join the conversation! Follow our Semi-Retired MD  Facebook page and join our Doctors or Professionals  group!

Semi-Retired M.D. and its owners, presenters, and employees are not in the business of providing personal, financial, tax, legal or investment advice and specifically disclaims any liability, loss or risk, which is incurred as a consequence, either directly or indirectly, by the use of any of the information contained in this blog. Semi-Retired M.D., its website, this blog and any online tools, if any, do NOT provide ANY legal, accounting, securities, investment, tax or other professional services advice and are not intended to be a substitute for meeting with professional advisors. If legal advice or other expert assistance is required, the services of competent, licensed and certified professionals should be sought. In addition, Semi-Retired M.D. does not endorse ANY specific investments, investment strategies, advisors, or financial service firms.

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Hi, we’re Kenji and Leti

we provide coaching and mentorship for doctors and high-income earners

Several years ago, we were newlyweds working as full-time hospitalists. On paper, it looked like we had everything: the prestigious careers, the happy marriage, the luxurious rental home, the cars, etc.

But in reality? Despite having worked for several years, we had very little savings. Despite our high income, we had very little freedom in terms of time or money.

One thing was clear: we had to do something.

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