Any new real estate investor looking to make that first real estate investment is undoubtedly aware that finding a good income property to purchase can be as daunting as buying your spouse an anniversary gift.

Unless you were fortunate enough to have had a property fall into your lap, you probably discovered by now that good rental properties do not grow on trees. Here are six resources where you might find good deals–all rather obvious (no brilliant insight here), but worth mentioning nonetheless.

A Real Estate Professional

Developing a good-working relationship with a qualified real estate salesperson can be an excellent resource for you. There are just two suggestions:

1. The more loyalty you give the agent the better; getting two or three agents to beat the bushes for you in the same community can be counter-productive because most real estate agents won’t generally spend a lot of extra time trying to hunt down a property for a real estate investor when it looks like a dog race.
2. Select a real estate agent who cares about investment property. Unless proven committed to rental income property, however, find another agent. For example, has the agent invested in real estate investment software? This is not to promote my own real estate investment software, but a reality. Any agent who is not willing to make an investment in his or her own business to adequately work with real estate investment property should not be expected to make an investment in your real estate investment business. You need a partner, not an opportunist.

Builder-Developer

Look for people that are in the business of selling their own real estate. Often you can find someone with a treasure trove of inventory motivated to sell off some of it.

Code Violations

Local building codes that change during the course of ownership sometimes put a seller into a difficult spot. For example, the state now requires buildings of a certain category to have fire sprinklers installed, or earthquake reinforcement. A sudden added investment to do that work may be more than the owner has to spend, and in turn might motivate the owner to sell at a reduced price instead.

Foreclosure-REO

When lenders foreclose on a delinquent loan and buy the property themselves at a foreclosure sale they end up with real estate owned (REO)–property they prefer to sell rather than operate. REO properties can sometimes be a prime source for good deals.

For Sale by Owner

It is common for owners to market their own properties to avoid paying a real estate commission. When properly handled, sale by owner (FSBOs) can be a good source for good deals.

Management Problems

Properties in need of maintenance can be an indicator that the owner no longer has a heart (or the cash) to continue managing the property and might want to sell. A call to the owner expressing your interest in the property might be all it takes to negotiate a purchase and good deal for yourself.

Regardless what resource you pursue, however, always run the numbers yourself, and do not naively accept numbers for a rental income property given to you.

Making a small investment into affordable real estate investor software to run those numbers and reports for you now will help protect your large investment later. After all, this is your money at stake here, not a salespersons, banks, or sellers. It just seems reasonable that you will do all you can to preserve it.

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