I've been told time and again that the biggest challenge faced by commercial real estate investors is finding enough high quality investments to keep them gainfully employed. A good friend of mine used to refer to finding new deals as "Feeding the Beast". Without a steady deal-flow investors are faced with two choices. They can either let their investment business starve, or they can choke their business by buying a less then stellar deal. Neither of these are good options, so if you are planning on being a successful real estate investor you need to figure out how to keep the deals coming. Here are a few ideas that I've used, or seen others use successfully.
Classified Ads: One friend mine in the business keeps an ad in his local paper every week year round. He has two variations that both seem to work pretty well. He either states that he buys commercial real estate, or he states that he has money and is looking for partners with good deals. This tactic has provided him with numerous deals over the years.
Networking: I have another friend who is an unbelievable networker. He tends to befriend people who are in the types of positions to refer deals to him. He probably know half of the attorneys in his town, and he's working on meeting the other half. I know that in 2008 100% of his deals came from networking. Of course he does still look for deals other ways, but networking creates a very large portion of his deal flow.
Direct Mail: This is one tactic that I have used several times. I have found that sending out a well written letter to a targeted mailing list causes the phone to ring for days. If you are interested in mailing to owners in Reading, PA send me an email and I'll share my letter template and mailing lists. I know some of you are thinking that I must be crazy to offer these tools. I do happen to make my living by selling real estate, but I know that investors will always be looking for deals on their own. I figure if I share my resources with you, and you find a deal that doesn't meet your criteria, maybe you'll refer the seller to me.
Brokers/Agents: Many newbie investors believe that you'll never find a good deal through an agent or broker. I used to be one of these newbies, but I have since learned that there are always great deals being marketed by professionals. I think that all investors agree that great deals come form motivated sellers. Well for me it's hard to believe that a seller ia very motivated if they haven't even taken the initiative to put their property on the market. I think that the secret to working with agents is making a lot of offers. Often agents will list properties for what the property is worth, not what the motivated seller might be willing to take. One of the most successful investors I've ever met simply looked at lots of properties and made 10 offers a week. A simple but extremely effective strategy.
Of course there are several other ways to find great deals. What is your favorite strategy?