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How to Find Your First Real Estate Deal: A Beginner’s Step-by-Step Playbook
How to Find Your First Real Estate Deal: A Beginner’s Step-by-Step Playbook
Finding your first real estate deal is a game-changer. It’s the moment you move from learning to doing, turning dreams into tangible action. But let’s be honest—it can feel intimidating.
Where do you find deals? How do you know it’s the right one? What if you mess up?
The good news? You don’t need to know everything to get started. You just need a clear, step-by-step plan. This playbook will give you exactly that—so you can find your first deal, build momentum, and grow from there.
Step 1: Pick Your Strategy
Why It Matters:
There’s no “one-size-fits-all” approach in real estate. Picking a starting strategy helps you focus your efforts and avoid overwhelm.
Beginner-Friendly Strategies:
Wholesaling: Find distressed properties, get them under contract, and sell the contract to another investor for a profit. Requires minimal capital.
House Hacking: Buy a multi-unit property, live in one unit, and rent out the others to cover your mortgage.
Buy-and-Hold Rentals: Purchase a property, rent it out for monthly cash flow, and build long-term wealth.
Action Steps:
Evaluate Your Resources: How much capital do you have? What’s your credit score? How much time can you commit?
Choose One Strategy: Don’t bounce between strategies—pick one and stick to it for 90 days.
Study Your Strategy: Read, watch videos, or talk to investors who have succeeded with it.
Step 2: Choose Your Market
Why It Matters:
Real estate is hyper-local. Understanding your market helps you spot opportunities others miss.
How to Pick Your Market:
Start Local: Your own city or nearby areas are a great starting point.
Look for Growth: Research areas with rising home values, strong job growth, and new developments.
Consider Affordability: As a beginner, focus on neighborhoods where properties are reasonably priced.
Action Steps:
Use tools like Zillow, Redfin, and Realtor.com to study average home prices and rents.
Look for signs of demand:
Low days on market (DOM) for homes.
Renovations or new construction.
Businesses expanding into the area.
Drive through neighborhoods to get a feel for the market and spot off-market opportunities.
Step 3: Find Deals
Why It Matters:
Finding deals is your #1 priority. Without leads, there are no offers. Without offers, there’s no deal.
How to Find Deals:
Driving for Dollars:
Drive through neighborhoods and look for distressed properties (overgrown lawns, boarded-up windows, peeling paint).
Write down the addresses and research the owners.
Direct Mail:
Send letters to absentee owners, landlords, or owners in foreclosure.
Keep your message simple: “I’m interested in buying your property. Call me if you’re ready to sell.”
Online Platforms:
Browse Craigslist, Facebook Marketplace, and Zillow for “For Sale By Owner” (FSBO) properties.
Search for keywords like “motivated seller,” “distressed,” or “needs work.”
Networking:
Attend local real estate meetups or join online forums like BiggerPockets.
Let others know you’re looking for deals—word of mouth is powerful.
Action Steps:
Schedule time each week to find leads (e.g., 5 hours for driving for dollars, 10 letters per week).
Use tools like PropStream or DealMachine to streamline property research and owner contact.
Step 4: Analyze the Deal
Why It Matters:
Numbers don’t lie. A deal is only good if it makes financial sense.
Key Metrics to Analyze:
ARV (After Repair Value): What the property will be worth after renovations.
Repair Costs: Estimate the cost to fix the property.
Your Offer Price: Use the 70% Rule as a guide:
Offer Price = (ARV x 70%) - Repair Costs
Example:
ARV: $200,000
Repairs: $30,000
Offer Price = ($200,000 x 70%) - $30,000 = $110,000
Action Steps:
Use free tools like Zillow or Rentometer to estimate property values and rental income.
Walk through the property or get photos to estimate repair costs (use a contractor if needed).
Run your numbers before making any offer—don’t rely on gut feelings.
Step 5: Make the Offer
Why It Matters:
This is where most beginners get stuck. Fear of rejection stops them from making offers. But the truth? Rejection is part of the process. Every "no" brings you closer to a "yes."
How to Make Offers:
Start with Confidence: Use the numbers you’ve analyzed to back up your offer.
Be Persistent: Sellers may not accept your first offer—but don’t walk away. Negotiate where possible.
Follow Up: Deals are often made in the follow-up. Check in weekly with sellers who initially say “no.”
Action Steps:
Set a goal: “I’ll make 2 offers per week.”
Use a simple script: “I’m a local investor, and I’d love to make a cash offer on your property. Are you open to talking?”
Keep track of your offers and responses to refine your approach.
Step 6: Close and Learn
Why It Matters:
Closing your first deal is just the beginning. Use it as a learning experience to build confidence and momentum.
What to Do After Closing:
Reflect: What went well? What didn’t? Write down lessons learned.
Celebrate: Acknowledge the win—this is a big step!
Plan for the Next Deal: Use your momentum to find the next opportunity.
Quick Tip:
Leverage your success. Share your story with potential partners, lenders, or mentors to build credibility for future deals.
Conclusion
Finding your first real estate deal isn’t about perfection—it’s about progress. By picking a strategy, focusing on one market, generating leads, and taking consistent action, you’ll move closer to your goals every single day.
The only question left: Will you take the first step?
