Great article – very informative and relevant. I also would like to add that the costs to transact real estate (commissions) can make or break an investment.

Out here in California the typical commission of 5.4% on the average California single-family detached home ($417k) will cost you over $22,500. That cost is shared by the buyer and seller. We recently did a blog post on the long term impact of this and how it can be avoided: http://www.homecoin.com/blog/?p=420

Again, great article – keep up the solid work!

Full disclosure: I operate the referenced website.

Just my 2 cents

Thanks for the information and the help as usual Brandon! I need to find some older experienced investors ASAP. Some of the Real Estate Clubs I have found seem to just be looking to sell the dream. Not really good on the help and advice. Thanks again!

Oops! Meant to reply but just wrote the comment below 🙂 See below:

The MLS use to be sufficient for finding properties, but with the increase in the market it is getting more and more difficult. I think the best way, today, to do it is:

1.) Direct Mail – sending out thousands of targeted letters to potentially motivated sellers and helping those who need help.

2.) Driving for Dollars – driving around and looking for properties that are ugly, have long grass, broken windows, terrible roofs, etc. Often – the owner is desperate to sell but knows that they can’t in the current situation. Sometimes it will be out-of-area landlords who have given up. Write down their addresses, find the owner via public record, and either call or send letters.

As for real estate clubs – I think there are good and bad ones. Some are just about the pitch, some are about information. Try to find the good ones (ask experienced investors for recommendations) and become a friendly face at them. Older, experienced investors LOVE to offer advice and help new investors out – as long as they don’t feel they are wasting their time. Appeal to their ego, let them help you out. Most will do it for an occasional cup of coffee!

Hope that helps! Great seeing you again (in a virtual way, anyways) Thomas!

I want to invest but right now putting all the pieces together has taken longer than expected. I wanted to find a mentor or someone I could to all the leg work for until I can experience to do it on my own but I haven’t had any luck. What do you think about Real Estate Investment Clubs?

Definitely. I’ve not personally invested in a REIT but I hear good things. Thanks for reading and commenting!