The SFR Show
The SFR Show
Jun 21, 2022
How to find off-market properties in today’s market
Play • 28 min

Anson Young is a real estate agent and the owner of Anson Property Group, which is based in Denver, CO, and specializes in distressed property purchases. As a full-time real estate investor for the past ten years, he has completed more than 120 wholesale deals and 95 flips. Anson and his team specialize in marketing directly to sellers for off-market deals, using many of the methods that can be found in his book Finding & Funding Great Deals.

A common talking point today is that supply is low, demand is high, and cash-flowing deals are hard to come by. Anson pushes back on this by focusing on finding off-market deals. These off-market properties, otherwise known as pocket listings, are a great source of leads for those that know how to find them. By using some old-fashioned elbow grease, Anson is able to find cash-flowing deals in competitive markets. Today, Anson shares his insights on how he finds off-market deals in today's market.

Episode links:

https://www.instagram.com/younganson/?hl=en

https://www.biggerpockets.com/users/anson

https://www.youtube.com/c/ansonyoung

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Transcripts

Before we jump into the episode, here's a quick disclaimer about our content. The Remote Real Estate Investor podcast is for informational purposes only, and is not intended as investment advice. The views, opinions and strategies of both the hosts and the guests are their own and should not be considered as guidance from Roofstock. Make sure to always run your own numbers, make your own independent decisions and seek investment advice from licensed professionals.

 

Michael:

What's going on everyone? Welcome to another episode of the Remote Real Estate Investor. I'm Michael Albaum, and today I'm joined by Anson Young, who is an investor, agent, wholesaler out in the Denver, Colorado area and he's gonna be talking to us today about how do you find off market deals in today's market environment. So let's get into it.

 

Hey, everyone, before jumping into the episode today, I would just like to encourage everyone to leave us a rating or review wherever it is you listen to your podcasts, they are super, super helpful for us in getting out there to a wider audience. So if you'd like the content we're producing, or even if you don't like the content we're producing, we'd love to hear from you. Let us know how we can improve and do better, so thanks so much and well let's get into the episode, Anson Young, what's going on, man, thanks so much for hanging out with me today, appreciate you.

 

Anson:

Yeah, thanks for having me. It is awesome.

 

Michael:

Now, I'm super excited. So I know a little bit about your background. But I would love if you could share with our listeners who might not be familiar with you, who you are, where you come from, and what is your doing in real estate.

 

Anson:

Yeah, so I come from Denver and we were just talking about how there's not many natives left. But I was born and raised here and what I do is for since 2006-2005, I've done investment, real estate fix and flips wholesale. Wholesale are just now getting into kind of burr buying holds looking more into short term market and I've been licensed since about 2007. So I've been licensed almost as long as I've been investing.

 

Michael:

So right on we actually like just before this episode, we're recording with another guy who is a broker, licensed broker agent as well, as an investor we were talking about, does it make sense for investors to go get their license and kind of vice versa and so that was a really interesting discussion. Has it helped you in your investing being a licensed agent?

 

Anson:

Yeah, I don't know honestly, how people do without it, because I can't stand waiting for waiting on other people. So if I had to wait for somebody to send me comps, or if I had to wait for somebody to submit an offer, I would probably go insane. So being able just to do that myself, is huge. So but besides that there's a lot of advantages for sure. I have never regretted it. There are a couple of like very niche, creative real estate things that I can't do because I'm licensed, but it's never affected me. I don't do like sandwich wrap, lease options, whatever, I don't do any of that. So it doesn't affect me at all.

 

Michael:

It's not applicable. Wow, love the hot take, man. This is perfect timing, right on and so okay, so you just also spoke at the recent Bigger Pockets Conference, which if anybody was there, they hopefully heard tell us what that was all about.

 

Anson:

Yeah. So that was their first rookie conference, so they have a rookie podcast, hosted by Ashley and Tony and they, and they decided, You know what, they've been doing a rookie boot camp. That's a like a 12 week virtual boot camp and they decided, hey, why not do like a two day live event and so they did and so they put all their power behind it and it was geared completely towards rookies. I did like an informal poll, when I did my, my speaking of you know, who's done zero deals, who's done, you know, 12,35,10 deals and there was like one guy who did 10 deals, and I was like, why are you here? But for the most part, wrong conference, I was like, whoa, hey, doors over there. Could be a good guy. But no, like, I think that everybody there has done zero to one, maybe two deals and they were just looking to have guidance on how to do more how to finance them, how to find them, how to structure their business, how to implement systems, you know, basically just how to scale and how to grow. What to do next. So yeah, it was it was a really good vibe, I've, I spoke at the, you know, the big BP conference and the rookie conference, and the rookie was smaller, and more intimate and definitely, everybody's there just to learn, you know, as much as they can, so it's awesome environment.

 

Michael:

That's so, so cool and so you were speaking specifically about off market deals, right?

 

Anson:

I was yep how to like how to find deals at any market.

 

Michael:

Yeah, okay, awesome, which I think is so important for this market and kind of where we find ourselves. So give us just a little bit of insight, so you know what people who are at the conference got to hear about.

 

Anson:

So I do say, like any market, because I learned really quick, like if I'm in Denver, and I just do Denver things, and then somebody comes to me, and they're like, Hey, I bought, you know, 100 properties last year, and they're all $20,000 and I sent out yellow letters, and they're like, in Chattanooga, Tennessee, or something like those things, you know, that like the things that he's doing there might not work in my kind of a plus capital city market and so being from, you know, being working here in this market, and then now I'm also working in smaller markets, I feel like I can speak a little bit more to like finding deals in any market, because it's, you know, I'm kind of working from the top down, I'm working from what works and like, the highest competitive, insane market and when I implement that strategy down into a less competitive market, it still works really well and so whereas I think the reverse isn't always true, where they're like, you know, I've talked to guys who have done exactly that they're still selling, sending yellow letters to, you know, just basic, generic lists and they're still getting, you know, a dozen deals a month or something like that. It's like, that just does not work here. Whereas my methods definitely work there. So I feel like, you know, I feel like a little bit of elitist there. But no, but, you know, we definitely, we definitely talked about, you know, I wanted to implement, you know, hey, here's what's working today, here's what's working, not just in my market, but in multiple markets, and also kind of how to how to do like a fast start. So like what you should do when you get home. Here's kind of a fast start guide, based on the things that I talked about. So we talked about some different strategies that we talked about, like, hey, this is exactly what I would do. If I was starting today, in almost any market, it would be applicable. So that's kind of what we went over.

 

Michael:

Awesome. Can you give us a little bit of insight into like, what that starter guide looks like? I mean, what would you do starting today.

 

Anson:

My favorite, like, like, so, you got to look at like your lists of who you're targeting, especially when you're going off market, your list of who you're targeting, and then how you're targeting them. So what you're sending them how you're contacting them and so my who is definitely my favorite list, if I'm a rookie, and I don't have a lot of money, but I might have more time than money, I'm gonna go driving for dollars, I think it's still, it's still my favorite list, it's still, you know, the least amount of competition on any of our lists, it's almost like nobody wants to just jump in their car, put in the work to, you know, write down the addresses of, you know, the 10 worst properties in a neighborhood or whatever that looks like so. So for us, you know, we're all we're almost like one of one or one of two people who are contacting these, these homeowners, because they may not be in foreclosure divorce, they may not be dead. The only thing wrong is that their house looks terrible and there's no list for that and so unless you go and you and you put eyeballs directly on to those properties, and so.

 

So if I was just starting out, I would start there and then again, if I had more time than money, I would cold call that list, that's going to be the most aggressive, direct way to get a hold of those homeowners to figure out if they do need to sell if this is something that that might work for them and so, you know, and everything depends on goals and if you're looking for 100 properties this year, versus like two rentals, your entire strategy is going to be totally different. But, you know, in general, if I'm a rookie, I'm going to start there. I'm going to network with agents in the area, see if they have any upcoming listings that are maybe pocket listings, or, you know, if they ever come across a hoarder house, or if they ever come across something that's just so far outside their wheelhouse, like, I'm their solution, right? I'm the guy that can come and help save the day and then I'm going to go network with wholesalers as well and so, between those three activities, you know, you should be able to kick start, you know, finding deals in pretty much any market because now you're in front of two, two gatekeepers, you have wholesalers and agents who are in front of deals, and you're going out and you're looking for deals yourself and contacting homeowners directly.

 

Michael:

I love it. Dude, that's such a cool like three pronged approach. So when it comes to finding lists or scraping lists, I mean, I hear it all the time. What are some actionable like programs or sites that people can go to and use to come up with these lists or get access to these lists?

 

Anson:

Yeah, if you look at kind of ease of use, you know, something that you can go in 15 minutes later pop out a list, you know, something like a prop stream type product is going to be just, I mean, it's designed to be easy that way, right? So you can go in there, sign up for an account, I think they have like a 14 day free trial or something like that. Go in there, say I want all of the pre foreclosures in these zip codes and boom, it'll, it'll give that to you, you might have to pay extra for it, for exporting it or something like that. But, but that's like, you know, five button clicks, and you should have some sort of lists, you know, high equity absentee, you know, they have different metrics in there that you can kind of just click a couple buttons and have a list in your hands. If you want a little bit more hands on, you could go to List source, which is kind of kind of the gold standard of just backbone lists that almost everybody goes in. But there's like a million different options inside of there. So I can understand that it'd be confusing to kind of find exactly what you're looking for because there's, there's so many different options inside of there and then you could export a list that just does you pay for, and it doesn't make sense, because you just clicked one wrong button or something like that.

So I understand like ease of use, it's not the easiest thing to use but if you look at title companies, they they'll use lists, sources, their backbone for all of their, their data, like land title, uses them as a backbone, my MLS, for being an agent, and our tax system is all based on the same company that owns list source and so all that core logic data, it's, it's, you know that there's hundreds of MLS systems that use the core logic, list source backbone. So it's kind of an industry standard for title companies, agents, and where that data lives. So I like to go directly to where the data lives because I don't know where prop stream gets their data. It seems to be okay but I kind of I like going directly to the source but I understand it's hard to use.

 

Michael:

Yeah, no, that makes a ton of sense and that's a really good tip and then, so when it comes to agents and wholesalers, so from the agent side of things, talking about pocket listings, or off market deals, I think a lot of investors struggle, especially newer investors struggle, because they haven't built a name for themselves. They're having trouble getting access to those types of deals. So what is something an investor can do, especially when he's just starting out to position themselves to be able to take advantage of or get access to some of these popular things or off market deals?

 

Anson:

Yeah, so for, you know, for agents, agents do get hit up by investors pretty often. I mean, I probably get a couple texts a week from investors that are kind of saying the same thing, like, hey, we're looking for more projects, if you have any, you know, listings that that are just outside of your wheelhouse, let us know, we'll come in, we'll pay cash we'll do you know, they'll do all the investor things. The whole nine yards. Yeah, so I get that it is kind of competitive, I think it comes down to like rapport, you know, building up a relate an actual relationship with agents and not just kind of a transactional, like, hey, I'm going to be nice to you. So you can give me deals or something like that, like, I think people can, can see through some of that. So if you want to actually like form a strategic partnership with people, you know, sit down, buy them coffee, you know, talk to them about what they're doing and if there's any way that you can help them because if you're an investor, and you don't have your license, you will come across sellers who want to just list their house and so having a resource as an investor of like, hey, you know, my, my friend, James, is an agent and he can take care of you and so if you're, if you're kind of reciprocating, and giving, you know, to an agent or a few agents, they're going to be more, you know, much more willing to give you a deal when it comes across their desk, like hey, this you know, hoarder House came across in my brokerage. Everybody's like pointing and going, like, what the heck do we do with this thing and, you know, this could be a good opportunity for you to take a look at, but yeah, being in front of the gatekeepers is, is very powerful. So whatever you can do to get in there, I suggest being nice and building rapport, but whatever you could do, get in there.

 

Michael:

Yeah, that makes total sense. I mean, it kind of goes to drive home. The point something that I've been preaching for years is like relationships, like real estate's relationship business. It's not an asset business. It's not a sit, you know, physical bit like I think it's all about relationships and this goes to really drive that point home, so I think it makes a ton of sense.

 

Anson:

Yeah, 100% a relational, absolutely.

 

Michael:

Moving on to wholesalers because I think a lot of people have a view opinion preconceived notion about what wholesalers are, you know who they are, the kind of people they are and the things that they do. So there are good ones kind of like everything in life, and then there are less good ones. So how do you develop a relationship with wholesalers and like, especially as a new person? How do you know that they're just not pulling the wool over your eyes?

 

Anson:

Yeah, that's a like, that's so prevalent, like that. Just everybody knows that most wholesalers aren't great. I said, you know, I said it from stage, I was like, finding, finding wholesalers is easy. Finding a good wholesaler is different, like, that's the hard part.

 

Michael:

Right, right. Right, right.

 

Anson:

So it's gonna come down to like weeding, you know, weeding through it, you're going to, you know, if you meet 10 wholesalers, maybe one or two of them are doing good deals that are, that makes sense and so you won't know that until, you know, you might talk to them and get a feel, you know, feel for them. But a lot of people, it's kind of hard to tell if they're, you know, if they're legit there, but you might just start having to see their deals, get on their list, start getting deals across your desk, and analyzing them and you're gonna have to analyze them anyways. So, right, and it's good practice. I mean, if you're like, if you're a rookie, or if you're somebody just starting out, like, I tell, I tell investors and agents and whoever I can, like, look, get these, get these, get this input, and then evaluate it. You don't have to be ready to buy, you don't have to be ready but you're putting in the work of figuring out what these properties are worth estimating repairs. plugging in numbers into your formulas of what works for your business, does this work as a rental? Does this work as a short term? Does this work as a flip, you're putting in those reps and so if you're putting in the reps anyways, and you're getting, you know, 10 wholesalers worth of deals across your desk, you know, analyzing those and really figuring out like, oh, these two are actually having, you know, consistent deal flow with numbers that makes sense for my business and then you might, you know, you might just kind of unsubscribe for some of the other the other ones or, occasionally, the worst wholesalers come across good deals, and they just don't know it and so sometimes, you know, sometimes you'll find a diamond in the rough from somebody who you might write off, so I don't, I don't subscribe because sometimes they just don't know, maybe the deal, or maybe the values in the land, or maybe the values in a pop top or maybe the value is in a rezoning play and they're trying to push it as a flip. That doesn't make sense. Right, so, you know, don't there'll be some diamonds in the rough there, but you're going to be analyzing deals and double checking the work anyways. So, so that's going to be a good way to weed out the good ones from the bad ones, for sure.

 

Michael:

Yeah, that makes a ton of sense. All the wholesalers that I see they give you a deal. So this is the purchase price, this is the rehab cost, this is the ARV. I mean, what are some resources for people to get accurate at validating those numbers for themselves because I don't think anyone should take anything at face value you want to trust but verify it. So how do I figure out like, what is the ARV and what is the rehab cost, if I'm just getting started?

 

Anson:

Yeah, those are, those are huge questions because those are those are definitely the two blind spots that most new investors have. So they're, you know. It's not just finding a deal and then financing it, but now it's like, now I have to evaluate it and then we have to figure out rehab costs and it's very daunting. I would say like, the easiest way to do some of that is to lean on others for their expertise. So if you have network with, with agents, you know, see if they can run some comps or you know, teach you how to run a couple comps, you know, in that or watch some YouTube videos on you know what, what are comparables? What does that look like? Can I find them on Zillow? Can I find them on Redfin? A lot of investors they will just lean on the expertise of an agent to pull the CMA or pull the ARV for them and then, you know, basically trust that number but based on a little bit more expertise than the wholesaler, okay, but learning to do it yourself will always it'll always benefit you, you know, whether you have to teach somebody on your team later on. Whether you know, become an agent yourself or something and have to do it in the long run.

Go at being able to figure out what comparables look like and then where to go find them. There are you know realtor.com Zillow, Redfin, there are places where you can go find comparables, and then really just try to compare them apples to apples and then for rehab, it's kind of the same thing because if you don't, like, I don't know anything about rehab, especially when I was starting off and so being able to lean on a general contractor, or somebody who has that experience was huge, because otherwise I wouldn't have even gotten into my first flip. Like, I have no idea what these things cost and what labor costs and right time, timelines look like, even if you have to pay for that contractors time, it's always worth it, it's always worth the education. So if you're like, hey, I'll pay you like, $50 an hour to go walk this property and if they have an extra, you know, a couple hours or a little bit of downtime. You know, say I just need a line item bid, and I want you to walk through the property with me and that 100 or $150, for them to walk through the property is that education is priceless and if you can get, you know, if you can get two or three other newbies to pitch in to, I mean, you could you could potentially offer a contractor, you know, hey, four hours of your time, for you know, 567 $100, everybody just pitches in, like $75, or something like that and the contractor slow walks you through a property that education is priceless and if, you know, barring that, if you want to get two or three contractors to go and give you bids on our on a property and then you can compare those bids kind of side by side, like this contractor is charging this for paint. This one's charging this for paint. This one's charging this for paint like what's, what's the real number, I just average it out, like this guy's way high. This guy's way low. This guy in the middle looks, looks good. You know, there's a couple of different ways to kind of get a gauge and an idea of what rehab costs are. But I mean, I mean, there's a rehab book on costs, but the minute the book comes out, it's already out of date, right…

It's like two months later it you know, you could almost just burn it, and it wouldn't matter because sorry, Jay Scott but yeah, like, like if you, you know, you go through a pandemic, and all of a sudden labor and wood prices are just off the charts. A normal person wouldn't know that but if you're in the business every day, you know that those things are going up and so relying on somebody who's in the business every day is usually the way to go.

 

Michael:

Yeah, that's such a good point. That's such a good point Anson, and curious, get your thoughts on like just the physical, like nuts and bolts of doing a transaction via a wholesaler, as opposed to going with an agent or a more traditional route? What are some things that people should be aware of and like, can they go get an agent to represent them as a buyer's agent sell on a wholesale deal?

 

Anson:

Most, most good wholesalers will let you do that they don't care. What they will do is they'll ask you to roll your agent costs on top of the price. So if it was, you know, $200,000 is their price. They might say whatever your agent wants to get paid, it's gonna go on top of 200. It's not coming out of my pocket. And so they'll so yeah, so the big wholesalers here in town, including my, I wouldn't say I'm a big wholesaler, but I have had buyers who bring their agent, and you know, they can get paid just fine. It's not a big deal. Now the, the transaction is a little different depending on how the wholesalers are doing it. If they're doing an assignment, it's going to look a bit different than if they're doing like a double close and so as a as an investor, you just have to know the difference between those two and what that looks like. You know, a lot of times the earnest money is nonrefundable.

 

So know that once you put the money down on that deal, you might not get it back. Most of them are nonrefundable. It's like $7,500 nonrefundable and that kind of covers the wholesaler costs if you don't close like they're like, my earnest money is covered on my end, plus maybe a little bit of extra money for them for their time or something like that. But so no, you know, in a normal real estate transaction, you have outs in the contract to get your earnest money back in a wholesale deal. It's pretty much hard from day one, it's just gone. So you buy so you're either closing or you're losing your money. You know, and everything else besides that it's pretty sort of normal. They might give you an inspection window. They might just say as is like, do your own due diligence, but they're not going to budge on price. They're not going to you know if you find uncover a structural issue or something like that, they still might not let you out with the earnest money because it went, you know, it went hard on day one and so they're like, either close it or, you know, walk away, like those are kind of your options. So, yeah, on a normal real estate deal, you might have more contingencies for your inspection and stuff like that and then most wholesalers are looking for either hard money, cash or something that closes fast without any headaches or issues. If you come in with an FHA, you know, offer, and you're trying to buy a wholesale, I don't know if the wholesaler is going to take your, you know, take your offer, because there's still an appraisal, there's still like all these other hoops to kind of jump through. So you might just have to go get a hard money loan for that deal.

 

Michael:

So Anson, I'm curious to get your thoughts because the like the ins and outs and kind of the some of the risks, I would say, associated with a wholesale deal tend to be or sound to be a bit higher than a traditional MLS deal or just a traditional transaction. So for that reason, do you think that wholesale deals lend themselves just by nature, by virtue of the deal to more experienced investors or have you seen newer investors utilize wholesalers and break into the market?

 

Anson:

I'd love to see both, I would say as long as you know, you know what's going on when you go into it. All the things that I just talked about, like earnest money, being hard and having to have fast funding and all that stuff. I have seen brand new investors who have who haven't done any deals, you know, they'll buy like a triplex from a wholesaler, you know, as their first deal. So it happens all the time, the hoops are just a little bit more to jump through and to figure out like, hey, if it is an assignment, that's what this looks like, if it's a double close, that's what this looks like. So just knowing those things going into it, I think any new investor can utilize wholesalers as a resource for sure. Yeah, shouldn't be a problem.

 

Michael:

Okay, great to know and so this has been like super fun super eye opening man if people want to reach out to you learn more about you ask you some follow up questions where's the best place for them to do so?

 

Anson:

Yeah, you can you can find me on Bigger Pockets. Just type in my name it'll it should come up with my profile, send me a message there. Find me on Instagram @younganson or find me on YouTube Anson Young and either one of those reach out say hi, if you have questions or need anything just hit me up.

 

Michael:

Right on, well, thank you again man for coming on, this has been a lot of fun and I'm sure we'll chat soon.

 

Anson:

Awesome, sounds good. Thank you so much.

 

Michael:

Hey, you got it, take care Anson.

 

Alright everyone that was our episode with Anson, a big thank you to him for coming on the show and sharing some really actionable takeaways for folks to do, whether you're a seasoned investor or just getting started in how to go secure some off market deals, so you're not fighting with everybody on the MLS. As always, we look forward to seeing you on the next one and happy investing…

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