In my last article I discussed where to find buy to let cash flow positive properties, it stands to reason that now you want to know how to go about finding them. So, lets get right to it.

As I mentioned in the first article, it takes great effort, but it is by no means rocket science. If you are serious and committed to putting in some effort, which must be consistent, you are likely to find many cash flow positive properties. You will also find, that buy to let properties in the residential market will get even easier to find with every increase in interest rates. Take careful consideration of this, because if such properties where too easy to find, property investor would be doing it and we wouldn’t need to discuss it at all.

To continue from the first article, there is no particular province or area for such properties, and hence finding strategies can be applied anywhere.

1.    Research – The very first step to finding cash flow positive properties, is to research areas in the country. This could be in one city or one province or as many places as you want to research. Preliminary research gives an idea which market areas are highly priced and traded and which are emerging and therefore better suited for cash flow positive deals.

2.    Finding the tipple Ds – How to find properties under divorce, distress, death or financial trouble is done generally in two ways. The first one is through consistent marketing, which we will discuss in a moment and the second is via networking. Most people will find the networking part far more difficult than the marketing system, usually due to lack of time. However, that said, networking is the cheapest way.

a.    Marketing – Serious property investors have very complex marketing systems that run like a well-oiled machines. But to start with, you can look at leaflet dropping in areas that you researched and believe the rentals yields are good. Statistically speaking, you will need around 10,000 leaflets to get around 10 calls. From these calls you may expect to make one deal. This statistic changes with market cycle. If the market is buoyant then you will need 10 times more than that for the same result. Which bring us back to research, to qualify in advance the area. If it is a highly traded area, you are likely to fail fast. So, do the homework before hand. Then you can move to advertising in the classifieds specific to areas you are interested in.  After that you can move to building your own sourcing team in various areas. Your sourcing team will be different in profile and capabilities in various areas.

b.    Networking – networking requires speaking with people, knowing the community well, keeping in touch with people and generally being out there to ensure that you are remembered all the time. This of course requires time and so is limited to location. Most will find it difficult to network with the whole country. It's much easier to network in communities within close proximity.

3.    The low and mid market areas – In these areas the same principles as above apply. The difference will be in leaflet content, language, motivations and sourcing team profile.

Before you embark on your hunt brush up on your negotiation skills, buy some books, practice with friends and family, whatever you do, if you don’t hone your negotiation skills you are likely to lose deals or buy at a higher price than you should.

Hunt with intent, focus and certainty

Know what you want in the residentail buy to let industry (it is very different from ohter property industries), aim just for that and in the knowledge that you know exactly how you intend financing. Eliminate all uncertainty before you leave the door. Confidence will have an impact on the people you meet and will increase your chances.

Make rules for yourself on what you would buy and stick to them. If you have done your research and know your math, then you should quickly be able to identify a deal when you see one. Deals that break your rules will most certainly create problems later.

Mindset is critical

Starting with lead qualifying, you need to be gently brutal and unemotional despite the adrenaline and excitement you feel when working a hot lead. Let your rules guide you and abide by them. Only give offers when the math works. If the math doesn’t work, drop it. Don't get caught up in the fear that your offer won't be accepted or will be laughed out the door.

When negotiating, don't go directly to price. Take your time, speak to the person, form a relationship before speaking about price. All the while, let the person know that you are serious and that your offer is 100% guaranteed to go through. Don't babble, be calm, look the other person in the eye at all times when talking, reading a person while speaking to them can give you great insights. Ask questions about the property. Find out why they are selling. Be warm, but not too chummy, chummy. If the seller is confident that you are a “sure thing”, your offer may be accepted above a higher offer that is not so sure to get financing.

In the triple D's. Sympathize, slow down, listen and be diplomatic in answer. You need to bring the person to be acceptant of your thinking. Hearing them is the first step to building relationship.

Keep doors opened

Never close the door on a deal that is rejected until the property is sold. Property investors find many times, that their offers will be rejected and that's fine, just remember to follow up your offers in one, two or three months. Take your time, the longer the property remains on the market the better the chances of your offer finally being accepted. If too many of your offers are being accepted straight out the gates, then you are probably paying too much. Remember this is the residential buy to let market.

That is all folks. If you live in the impression that property investing is only about capital growth in the entry level developments, I hope these two article series showed you a different side of life in property investing. The side of life that accepts cash positive deals and requires effort to build a portfolio. But when all said and done, great wealth and financial freedom can be achieved for generations to come with commitment and persistence while utilizing income-generating properties.

This part 2 of a 2 part article, first article is: Do positive cashflow property deals exist right now? 

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