When you read the title of this thread, you are probably wondering where I am going with this article. This is not about working with or being friends with your competition, although I think that can be valuable. It is about knowing the deals other people are getting.
I have this terrible habit, it is discouraging most of the time. Once every two weeks or so, I do my target search, but rather than looking for active properties, I am looking at closed sales. I basically go through every deal and I do a title search on that purchase. When the property is bought in an LLC, Corp or with no mortgage you know it is to an investor.
Once I have the name of that entity, I can do another search that let’s me see all the properties they own. I also check the California Secretary of State web site and see who the owner of the entity is. Not only does this process make me feel like a stalker (lol) but it gives me an idea of two things: the deals other investors are getting in the market and who is doing the buying and how they are taking title and getting financing.
When we wholesaled House #21 when my friend mentioned who the buyer was, I had no idea who he was. But when he mentioned the two entities he uses to buy in, I instantly knew he was one of the biggest players in my market. That made me feel pretty comfortable with the deal automatically. We also had a good chat and we had both heard of each other, but never officially met (we still haven’t).
The reason I am bringing this up, is I did this search last night, and normally I get pretty frustrated that people out there are getting the smoking deals, the market really has changed. There was maybe 3-4 deals I would of bought at the prices other investors got them compared to the 20+ I am used to seeing. This means that the market is getting saturated with other investors and everyone is sacrificing profit margins to buy properties. Fix and flippers (aka: me) are the first people who have to back out because we have to pay 10% less than a long-term investors out of the gate (can you say closing costs).
Don’t get too discouraged, we do have 1 house in escrow still, and 4 or 5 rehabs going on. But clearly it is time to broaden our horizons until banks release some more inventory. I am just lucky that we have the inside track with quite a few REO offices, they should be good for 1-2 properties a month at great deals.
Please do this search, drive-by the properties and analyze the deals. If nothing else, this will provide you massive encouragement that other investors are out there succeeding in real estate. Your personality type should know that if someone else can be successful at something, you definitely can be too!