Finding House Deals in This Weird Market: Top 3 Strategies

TLDR
The acquisition price is the one variable you actually control. Three strategies for finding great deals, ranked by market size: be fast, better, or brave on the MLS; recruit a newer wholesaler and become their insider; or go direct to the source with lists, mail, and cold calls. The smaller the demand for a property, the better your price.

Table of Contents

The Formula

If you can’t get a deal on your next real estate investment, you’re going to fail as a house flipper or a real estate investor. Most people simply can’t find good deals because they’re looking in the wrong place. What ends up happening is you overpay, or you don’t get started at all.

The formula is simple. Your sales price, what you’re going to sell the property for, minus your acquisition price (what you purchased the property for), plus the rehab cost, plus other costs like insurance, taxes, real estate fees, title fees, closing costs. All of that subtracted from your sales price equals your profit.

But here’s the thing. Your renovation costs, no matter what the gurus might tell you, can’t really be planned out to perfection from the start. Things come up. Trust me. Seriously, 10 years of being a contractor myself and doing house flips even more than that now, I know that surprises happen. You open up the walls and find something you didn’t expect. A contractor runs off the site and you have to get somebody else to come in at higher prices. Codes enforcement comes out with a new code they’re enforcing in your hometown and you have to deal with that. Those are just a few of the many things that make it really hard to predict with perfection what the renovation cost will be.

Then you have other costs. Maybe after a few projects you can figure out every single one of those other costs and plan them out perfectly. But I guarantee you won’t on the very first one. These are going to be variable. You can at least set a budget for it.

The sales price? Sure, you’re going to get comps from your real estate agent. You probably know the market well enough to have an idea of what it sells for. But none of us control the market. That’s an uncontrollable factor. You can get in the ballpark.

So here it is: the acquisition price is the one thing that you have absolute control over. You get to say whether you buy a property or not. When I’m flipping a house or buying a real estate investment, I want to set myself up with the biggest possible head start that I can. That means getting a great deal on the front end.

Key Concept
Does that mean whoever sold it to you has to get a bad deal? Not necessarily, if you know how to look. The acquisition price is the one lever you fully control. Sales price is market-dependent. Renovation costs are unpredictable. Other costs are variable. But you get to say yes or no to a deal.

Control starts at acquisition. Everything else is damage control.

Strategy 1: Ticketmaster (The MLS)

To understand how to control acquisition price, you need to understand supply and demand. The supply is the house you want to buy. That’s not going up or down. It’s just the house. The demand is the number of people who want to buy that house. That’s what you can control, and that’s really what we’re talking about.

Think about it like concert tickets. All of us have bought concert tickets before. The first strategy is like buying on Ticketmaster. It’s the most popular way to buy tickets for your next Taylor Swift concert. Everybody puts their tickets on Ticketmaster to sell, everybody goes to buy on Ticketmaster because it’s really easy. You can get on your computer right now and figure out exactly what you have to pay. That means the demand, the market size, the number of people who want to go buy those tickets, is as high as it can possibly be.

That’s just like buying your house on the MLS. For those of you that don’t know, that’s the multiple listing service. If you’re buying through or from a real estate agent, you’re buying from the MLS. People also just call it “the market.” I also couple this with Zillow, Trulia, Realtor.com, some of the other big names. If somebody wants to sell their house, they put it on those big markets for you to look at from the safety of your own home. Everybody is doing it. If everybody is doing it, demand is super high, and the price is going to be as high as possible.

Not only that, but real estate agents don’t get listing agreements by telling people to price low. They don’t say, “Hey, I think that if we take that $200,000 house and list it at $180,000, it’ll sell really quickly.” You wouldn’t take that deal. Instead they say, “Hey, I bet we could sell that house for $220,000,” so they can get you to sign the listing agreement. From the start, houses are generally overpriced when they’re on the market. Not at market price. A little over. But because demand is so high, sometimes they find a buyer because people are competing against each other.

There are three tactics you can use to find deals on the MLS, and a fourth trick most people don’t understand.

Tactic 1: Be Fast

You need to constantly watch the market. Be the first one to leave an offer. You do that by making sure all the new stuff that goes on the market, you’re there and you’re ready to quickly give them an offer.

What happens is you’ve effectively made the market smaller. Most people who are shopping on the market are going to be a little bit slower. If you put an offer in front of that seller’s face today, they have a choice to make. “I know that offer might be a little bit lower than the $220,000 we listed the house for, but I don’t want to wait and find out that nobody actually wants it at $220,000. So maybe I will take this offer that’s a little bit lower.”

You’ve carved out a smaller market just for yourself. Now, there are going to be other people like you, because a lot of people use that strategy.

Tactic 2: Be Better

Better means you give them a cash offer as opposed to a conventional mortgage, FHA loan, or VA loan. Everybody knows that cash has a higher likelihood to close because there’s fewer obstacles in the way.

Those obstacles include:

  • The appraisal: The bank says the house isn’t worth what they thought, so they can’t give you as much money. Deal killer.
  • Appraisal repairs: The appraiser says you’ve got to fix a few things before they can buy at that price. More money the seller has to spend.
  • The inspection resolution: You get the house under contract, call an inspector, get a report, and based on that most buyers say, “Because of this, this, and this, I want a lower price or I want you to fix those things first.” Another obstacle.

By removing those obstacles, the appraisal contingency by being a cash buyer and the inspection resolution by waiving inspections, you have given a better offer.

Now, I’m not saying you should do those things. If you’re a newer investor, you probably really should get inspections done by a professional inspector because there might be things you miss if you’re not used to looking. One thing you could do is go to the house initially with a contractor or somebody who understands what could be wrong. They can do the inspection on the spot. That way when you leave the offer, you’ve left an offer knowing the problems you’re going to have to fix, which gets you closer to having an accurate rehab price in the formula.

Tactic 3: Be Brave

This is how you almost create a separate market for yourself. Be brave and be skilled.

There are houses that sit on the market longer because there’s a lot of work to do. It’s not your regular cosmetic flip where you put in new floors, do some upgrades to the kitchen and bathroom, put in new tile, make everything look pretty, fresh paint, new hardware. That’s a cosmetic flip. The ones that require real work, maybe roofing, new HVAC systems, tougher electrical and plumbing, maybe structural issues. You’ve really decreased the demand for that particular property because most people are scared of that type of work.

If you can teach yourself, if you can gain the confidence to take on projects like that, you will actually be able to find better deals on the market. Smaller market size. Smaller demand. Better price.

Pro Tip
The houses everyone else is scared of are where the real deals hide. Structural issues, major mechanical problems, full gut renovations. Most investors won’t touch them. If you can learn to scope that kind of work accurately, you’ve effectively created your own private market on the public MLS.

Tactic 4: For Sale by Owners

You need to understand how real estate agents get paid. Agents generally get around 6% of the sales price, split between the listing agent (3%) and the buyer’s agent (3%). If that house sells for $300,000, the buyer’s agent helping you probably gets around $9,000.

The issue is that if a for-sale-by-owner gets listed on Zillow, the real estate agent doesn’t get commission directly from that. They might negotiate a deal where you pay them separately, but that causes friction. Nobody wants friction. Water always flows in the path of least resistance.

So what happens? They don’t really show you those for-sale-by-owners. There are so many other houses on the market where they’ll easily get commission. They’re not motivated to push FSBOs. It’s not on their normal searches. They’d actually have to go out of their way.

Here’s why FSBOs can be some of the best deals:

  1. They almost always list too high. Which actually deters a lot of people from calling because they think, “These people are crazy. They’re never going to get $250,000 for that $200,000 house.” So they don’t call.
  2. They get bombarded by agents, not buyers. They get a barrage of phone calls from real estate agents who want to sign them to a listing agreement so they can put it on the MLS and get their commission. These for-sale-by-owners get worn out from all these calls.
  3. Buyers throw verbal lowballs and never follow up. “Hey, will you take $180,000 for that house you listed for $250,000?” “No.” And they never call again.
Most people miss the follow-up. Sales comes down to negotiation and follow-up. Put sellers in your CRM or on your list and call them at regular intervals. They won’t take an offer today, but maybe they will tomorrow. One out of 10 or one out of 20 is worth it, especially when you’re starting out.

What I suggest: even if they’re overpriced, if you’re really out there looking, go check out their house. It gives you more information about what stuff is selling for. Go out there, meet them, build a relationship. Then follow up. “Hey, is your house sold yet? Like I said, I’m still interested at this price. If something changes, let me know.”

You’re not going to get every one of those. But you might get one out of 10 or one out of 20. And when you’re starting out, that’s worth it.

The MLS is the biggest market with the highest demand. Use speed, better offers, bravery, and FSBOs to carve out a smaller market within it.

Strategy 2: Ticket Scalpers (Wholesalers)

If you really want a deal on concert tickets, you wait until the day of the concert and go down to the arena. You look for people who bought tickets and they’re trying to sell them to anyone who walks by. The longer you wait, the better the deal, because once that concert starts, the value of that ticket goes to absolute zero.

That’s basically what happens with wholesalers.

Here’s how it works. A wholesaler has a multitude of ways to find deals. They get a house under contract for, say, $175,000. They say, “Hey Mr. Seller, I’ll buy your house for $175,000.” Because of whatever strategies they have, they’re able to get that under contract.

Then they come to you, a real estate investor, a house flipper, a cash buyer. “Hey, I have this house for you for $190,000. It’s a great deal because if you bought it on the MLS you’d have to buy it for $220,000. I got it for $190,000 for you.”

But they don’t actually sell you that house for $190,000. What happens is they sell their position in the contract. They have it for $175,000, they’re telling you $190,000, you agree, so there’s a $15,000 spread. That’s an assignment fee. A finder’s fee. That’s how wholesalers get paid for all the work they do to sniff out these deals.

When you go to close on the property, you’ve taken their position in the contract. At the closing table, you’re closing with that seller and there’s going to be an extra line item on the closing docs: a $15,000 assignment fee to Mr. Wholesaler. A lot of people get sick when they see the amount these guys make. But it is what it is. If you don’t know how to find the deal, you’ve got to pay somebody who does. A lot of times it’s better than buying on the MLS. But not always.

The Clock Is Ticking

Here’s the important part. A ticket scalper’s tickets go to zero once the concert starts. Same thing for a wholesaler. They have a contract with a closing date. Let’s say January 1st. When January 1st comes, their potential assignment fee goes from $15,000 to zero because they no longer have a contract. It is critical that they move that deal quickly.

The Three Tiers of a Wholesaler’s Buyer List

An experienced wholesaler has a very large list of potential buyers. Having been a wholesaler myself, actually having quite a big operation where we were doing hundreds of deals, I know there are really three levels:

  1. True Insiders. If I wanted to buy one of those deals, or one of my business partners, or people really close to me. They get all of the deals first.
  2. Inner Circle. Other buyers who probably know better, you’ve done a lot of business with, and you know them to be great buyers. What does “great buyer” mean? Not a lot of friction. These off-market deals are generally more fragile than an MLS deal. No inspection drama, no bringing a bunch of people through the house, no renegotiating. They’re cash buyers. Strong closers. They’ll never leave you at the closing table.
  3. The Big List. If a deal didn’t sell to the Insiders or the Inner Circle, it goes out wider. Facebook Marketplace, Craigslist, email blasts, Facebook groups. These are the deals the other tiers didn’t want. Sometimes I see these houses selling for more than you could have gotten them off the market. Be careful.

How to Actually Find Wholesaler Deals

Don’t try to get in with the biggest wholesalers who obviously have a huge market and a huge list. Instead, recruit.

First, get on every single list. Every list from every wholesaler. Observe. Who are the ones getting a lot of deals and obviously have a big list? You’ll know. They’re polished, put together, branding and logos.

Then there’s Jeff. Jeff just got into wholesaling because he watched a bunch of YouTube videos, learned how to get a wholesale deal, bought some contracts, and got himself a deal. He’s freaking out because he knows he can’t make any money unless he has a buyer.

You want to find those guys. Find a newer wholesaler and start working on becoming their Inner Circle or their Insider. That’s the goal. You only need one, because you’re not going to buy 10 deals your first year. I don’t suggest that you do. Focus on one. Get a great deal on one.

Build a relationship with one wholesaler you see out there trying to find deals. Look at your mail, because these guys are most likely sending you mail. Build a relationship. As they grow, you grow. Then start with one, then two, and so on.

What you’ve done is effectively become a small market for that person. If you can prove yourself to be a solid buyer, you’ll get their best deals as they grow.

Common Mistake
Treating wholesaler deals like MLS deals. These are fragile. Don’t blow up the deal with inspections, renegotiation, and bringing a parade of people through the house. Be very conscientious of the fragile nature of that deal. Be a strong closer. Don’t get it under contract unless you know you can close. If it’s a good deal, you’ll be able to close. People will give you the money.

Find a newer wholesaler. Become their insider. One relationship can feed your deal pipeline for years.

Strategy 3: Direct to the Source

Instead of buying through the wholesaler, the middleman, you go get the deal yourself. This is the key. If you learn how to get a deal yourself, it changes everything. You will have a constant, measurable, controllable flow of great deals.

Everybody thinks this is super complex. It is not. I don’t know what it is about marketers that they try to make their field seem so mystical. It’s really simple. I figured it out. Maybe you’re not going to be as great as the marketing pros. Maybe they do things just a little bit better. But you don’t have to pay a marketer if you figure out how to do it yourself. Even if you’re only 80% as good as them, that’s still way better because you’re not paying somebody to go do the marketing for you.

Step 1: Buy Leads

You get a list. There are multiple places to do it. This isn’t all-encompassing, just some of the bigger names:

  • PropStream
  • Property Radar
  • BatchLeads (or similar Batch products)
  • ListSource

You go on there and put in what kind of list you want. What area, what ZIP code, what census tract. Do you want people who are tax delinquent? People who have owned the house for four years or longer? Houses older than 30 years? Newer than 30 years? Every metric you can think of is a possibility in these list builders.

The best part: most of them have pre-made lists for people like you and me, real estate investors. They know exactly what you want. These are lists with some pain in them. Tax delinquent: they haven’t paid their taxes, they’re probably having money issues, they might be more inclined to sell. Just inherited a house from somebody and they don’t really care about it, they just want to get some money out of it. That’s where you find deals. They don’t care. You care.

You don’t need to buy lists from anybody special. Go to those websites. You don’t have to be anybody special to use them.

Step 2: Contact Them

Once you have the list, you do one of two things: send mail or call them. The list will have their site address (the house you’re potentially wanting to buy), their personal mailing address, their phone number, their email address, their name, people related to them, all that stuff.

Cold Calling

Give them a call: “Hey Mr. or Mrs. so-and-so, I saw your house on 123 Main Street. I’d really love to buy it. I’m a cash buyer. Is that something you’d be interested in?”

“No.”

Yeah, that’ll happen too. Get used to it. People for whatever reason get mad that you’re asking to buy their house. Don’t feel bad about it. It just is what it is.

Don’t be cringey over the phone. It’s literally: “Hey, I saw your house on 123 Main Street. I’m a local guy. I’d love to give you a cash offer on it. Is that something you’re interested in? No? Okay, no problem.”

There are advanced strategies, but this is good enough for now.

Direct Mail

Here’s the thing about calling: it’s basically free once you have the list. You can call a bunch. But if you’ve got some money, sending mail is way easier.

Take that list, send mail to everybody on it. You can spend about $0.50 per piece on yellow letters that say, “Hey, I want to give you a cash offer on your house.” Or you can do handwritten letters from a machine that actually hand-writes them with a pen so it looks more real. Those cost more like $1.50 per piece.

If you’re sending a list of 2,000 people at $1.50, that’s about $3,000. Of 2,000 people, you’re probably not getting that many calls. But you’ll get some. You might get a deal out of those 2,000 leads. You might get a couple.

Generally what I do is try to send around 1,000, maybe 2,000 per week, so you have a general flow of it. But you don’t need to start there. Maybe send 1,000 a month just to get a feel for it and feel what it’s like to talk to these people on the phone or cold call.

Get used to talking to people like this. Don’t feel bad, guys. You’re not trying to screw anybody over. You’re literally going to give them cash for their house. If they don’t like it, that’s on them. If they tell you to go away, that’s not nice, but sometimes they do.

Going direct to the source means you control the pipeline. No middlemen eating your margin.

Other Ways People Find Deals

I didn’t put these on my main list because they’re not strategies I use on a regular basis. But I know people use them and I know they’re effective. You should have the complete picture.

  • Tax sales. A lot of people buy at tax sales.
  • Auctions. Courthouse steps auctions. I’ve been down to buy houses like that. It’s a different feel. Pretty cool.
  • Foreclosures and pre-foreclosures. Buying bank-owned properties. People do that a lot.
  • Expired listings. If a house has been listed for 6 months, usually the listing agreement is for 6 months. If it’s been longer than that, the listing expires. Sometimes they renew with the agent, a lot of times they don’t, because it took 6 months and the house didn’t sell. Those people wanted to sell at some point. Maybe they’d want to sell to you.
  • Wholesaler fallout lists. This one will rub people the wrong way. All those emails and texts you’re getting from houses that wholesalers have? I’ve heard from bigger wholesalers that they only close 60% of the deals they get under contract. That means 40% just go away. Some people collect all the different wholesaler lists, wait a couple months, then give that person a call to see if they sold their house. You don’t even have to call to find out. Just look to see if it transferred title in the last couple months. If it didn’t, they obviously didn’t sell it. Give them a call. You’re probably not going to make any friends doing this. That wholesaler would not sell you any deals ever again. Real estate investor circles are pretty small in most towns, and you’ll get a bad rap. But it’s my job to let you know the different ways you can get deals.

Why Acquisition Price Is Everything

When I was just starting out, I thought the way to control deals was to understand construction. I thought I could get the prices for construction down, and that’s why I became a contractor, learned all that stuff, flipped houses with my own hands.

Here’s what I’ve learned: construction has a price. Yeah, you can control some of the things that spiral out of control. But at the end of the day, construction costs what construction costs. I know house flippers who have never done construction in their lives and are really good at controlling their cost. But it just costs money to do the renovation.

The one thing I found out that I always had control over is the acquisition price. I get to say yes or no to a deal. I get to control how good that deal is on the front end and just determine whether I’m going to buy it or not.

House flipping is the way to wealth. It leads to rentals, which leads to financial freedom. It’s how you control your financial future. Leave a job you don’t want and build something for yourself. It’s not really a job at that point. It’s work and life mixed together because you’re doing it for you.

The number one way to be successful in that game is to get good deals on the front end. That does not mean screwing people over. When you cut out all the middlemen and use strategy three, direct to the source, the seller doesn’t have to pay any of those other people either. Them discounting the price for you might put the same money in their pocket. They don’t have to go through all the headaches. That feels good for them. You get a great deal. You set yourself up with a head start. You have control.

The acquisition price is where you win or lose. Everything else, construction, carrying costs, sales price, has a price you can’t fully control. But you always get to say yes or no to a deal.

FAQ

What’s the simplest way to start finding off-market deals? Get a list from PropStream or BatchLeads, filter for your target ZIP code with some distress signals (tax delinquent, inherited, long-term ownership), and start calling. It’s basically free once you have the list. You don’t need a marketing budget, a CRM, or a team. You need a phone and the willingness to hear “no” a lot.

Should I use a wholesaler or go direct? Both. Get on every wholesaler list you can find and observe who’s newer and hungrier. Build a relationship with one or two of those. At the same time, start learning to go direct. Even if you’re only 80% as good as a pro marketer, you’re still ahead because you’re not paying the assignment fee. Long term, going direct gives you the most control.

How do I know if a deal is actually good? Run the formula: sales price minus acquisition price, rehab cost, and other costs equals profit. Use comps to estimate your ARV. Use your scope of work to estimate rehab. If the numbers work with a healthy margin for surprises, it’s a good deal. If you’re counting on everything going perfectly to break even, walk away.

What if I can’t afford to buy with cash? You can still use these strategies. Hard money lenders and private money lenders are common in this space. The point of being a “cash buyer” in the eyes of a seller is really about speed and certainty. A hard money loan can close in 10 to 14 days, which feels like cash to a seller compared to 45 days on a conventional mortgage.

How much should I budget for direct mail when starting out? Start with 1,000 pieces a month at $0.50 to $1.50 per piece. That’s $500 to $1,500 a month. You might get a deal out of it, you might not on the first round. It’s a numbers game. Consistency matters more than volume. Send every month and follow up with every lead that calls you back.