So how do you find good investment deals? Do you send out bulk mail to the zip codes you want to invest in? Do you perhaps use Craigslist ads to get sellers to call you? All these are good ways of generating leads, but you shouldn't forget to look at a very obvious source for good leads either: the MLS database. So what is the MLS and how can real estate heavyweights find good deals in it?
The MLS database is a real estate listing platform used by members of an association or grouping of real estate agents or brokers. It's a co-operative platform governed by an agreement between real estate brokers to allow each other to view and sell their listings. Simply put, it's a huge local database of real estate for sale.
The MLS is absolutely filled with investment quality real estate offerings. Because of this, it can be very helpful to have a broker who is investor friendly search the listing for you as they know what kind of data you're looking for. What you DON'T want is just a simple search of the MLS and a data dump sent to you that is difficult to analyze quickly (remember, as an investor, time is money). A little searching in the beginning will help you find a good broker to help you in this. Most of the time, you don't have to travel farther than your local real estate investing club.
There is also software out there you can use to try to automate your search process. The software should be able to pull the listings, determine the investment quality of each listing and then display the results in a way that makes sense to you. Unfortunately, while many tools claim to be able to do this well, not many are worth the time as it is very difficult to get them to accurately assess the value of a property without a physical inspection.
(By the way, a good method of doing a quick exterior inspection of a property and the surrounding area on almost any lead is to plug the address into Google Maps and check out the ‘street view'. You can also use Live Maps and check out the ‘bird's eye view'.)
A tool called "Investor Loft'" is showing great promise, however. It not only performs the steps listed above, but also lists the data in an manner you as an investor can understand and has lots of nifty extras that can eliminate hours or even days of number crunching. It is also free to sign up form, which is a huge bonus for investors just getting started.
In the end, whether you decide to use a real estate broker or work through online tools, no real estate heavyweight should ignore the investment opportunities that can be found on the MLS.
This article is based a chapter of book Be a Real Estate Heavyweight, entitled Investment Deals in the MLS by Ross Hair. For more information on the book, be sure to check out www.RealEstateHeavyweight.com.
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