I am asked that question almost daily.
The truth is, the answer is not glamorous. There is no secret weapon. In my years of flipping homes, I have found the MLS to be the place to find the best deals. First, Realtors tend to be honest and trustworthy, making their clients act honorably. In fact, the Realtor industry has designed the process to ensure the selling party is not a crook. I have only been burned by one real estate agent in my time, while I have been burned many times in wholesale or foreclosure deals.
What is a wholesaler?
Wholesalers are those how either buy at the courthouse or knock on doors to find properties to sell to flippers. We do buy a lot of property from wholesalers but trust me, it is 100% buyer beware. The wholesalers themselves are generally honest (they will not last if they are not), however the original sellers are not always and if the home was purchased at auction, nothing is ever known of it.
Why not the auction?
The auction is a dream world of most flippers where they buy homes pennies on the dollar like you hear on the commercials. In the real world, the auction is dominated by professional buyers (wholesalers) who spend two hours each day at the auction and ten hours researching before they go. They know each homes value and they tend to be friends with the other professional buyers they see each day. It is not uncommon to see buyers run up the prices for fun when they see first time auction attendees.
Hiring a professional buyer.
There are buyers in town who work for other people. They will do the research on a home you are interested in, they will attend the auction where they are a regular and bid for you for a fee. They are a good way to go if you are stuck on the auction idea, however keep in mind that what may seem like a good deal is not always. There is NO disclosure on real property sold at auction, city violations, building problems, mold, termites, structural damage are NOT reported on auction homes.