If You’re Looking for Real Estate Deals, You’ve Got It Backward

“Relationships are a day-to-day work of art.” – William Shockley

I’ve got an idea for you today that may seem a little counterintuitive. I’m going to suggest that the best, most experienced real estate investors out there do NOT spend most of their time hunting down deals.


You may be thinking, “What is a real estate investor if not the engineer of highly profitable deals? Isn’t the business of real estate investing itself all about hunting and finding the best possible deals, generating a dazzling income in the process?”

Well, yes … and no.

I won’t dispute that savvy real estate entrepreneurs will wisely leverage their collection of profitable, well-crafted deals in order to achieve personal and financial freedom. But the deals themselves typically hunt these investors down … instead of the other way around.

How do they do it? And how do you get deals to start pounding on your door? It’s a three-stage process – and once you’re past Stage One, you’ll be able to sit back, relax, and just let it happen.

The Stage One Dealmaker

When I first started in this business, I did, in fact, have to hit the streets to find deals. What I lacked in real-world experience I made up for with sincere motivation and fierce determination. I was out there digging, scratching, and fighting. I was what you might call a “Stage One Dealmaker.”

However, let me clarify something. I wasn’t looking for properties. I already knew enough to know that what I should really be hunting for were motivated sellers – that is, people with “situations” and “problems.”

So Stage One is when I was looking for the right people with the right circumstances – people who truly NEEDED someone like me to buy a property from them … even at a below-market price.

Dealmaker, Stage Two

It didn’t take long for me to want to move from Stage One to the time-leveraged approach of “Stage Two Dealmaker.”

In Stage Two, instead of beating the streets, you focus primarily on basic but effective marketing strategies aimed at those same motivated sellers. But your time is spent more wisely and more effectively. I recommend that investors transition from Stage One to Stage Two as soon as it’s financially practical – and start there if at all possible.

Motivated sellers are the people who see the “bandit signs” on street corners – the ones that say “I Buy Houses” – and think of them as a possible answer to their prayers instead of an unsightly bother. They call the “I Buy Houses” ads in the Sunday paper. They list their properties with an agent, hoping to be handed a ready, willing, and able buyer. They often respond to the “Stop Foreclosure!” mailings they receive, or scribble down a phone number from a TV ad promising a “written offer within 24 hours.”

The signs, the ads, the mailings – those are all tools for a Stage Two Dealmaker who is focused on getting his marketing message out and attracting motivated sellers to call him. He spends his time screening leads who respond to his marketing rather than pounding the pavements to find a deal.

But the Stage Two Dealmaker has the daunting task of figuring out which marketing methods are most effective in his particular market, and which he can reasonably afford. So, in Stage Two, it usually comes down to focusing on a couple of key methods and making them really work for you. You have to pick something and run with it, and try not to spread yourself too thin.

Stage Three: My Favorite

Yes, there is an even better way. And it’s one I seldom hear many real estate experts “teach.” It may take a little time to put together, but when you do, it will generate ongoing income through a steady stream of solid deals … with very little effort on your part.

Sounds unbelievable? It’s not – it’s real. I call this my “deal network” approach, and it’s the earmark of the “Stage Three Dealmaker.”

Instead of running ads in all the papers, putting up signs on every corner, running television and radio ads, and sending thousands of postcards per month, I take the time to teach others to do those things. And my arrangement with the people in my “deal network” is that I will pay them a substantial amount of money (not just a small finder’s fee) for each and every deal that they refer to me and I purchase.

The members of my network blanket the area with their own marketing, and, as a result, they come across a number of excellent deals. And because I offer them so much incentive, I usually get first dibs on the choice deals they want to wholesale. I literally cherry-pick the grand slams and leave the “good ones” for the next guy.

How powerful is my network? Well, in the last two months alone, I’ve done three deals with network colleagues, netting me $30,000, $41,000, and $19,000, respectively. Yes, that’s $90,000 in profits from three deals for which I had pretty much no competition.

Where do I find the right people for my deal network?

Sometimes, I handpick people I meet one way or another because they make a good impression on me. I feel that I’d like to help them become successful by helping me do deals.

Other times, they find me. When someone who’s not already in my network approaches me with a potential deal, I immediately start sizing him up. If I think he’s got integrity, good common sense, and a teachable attitude, I’ll take him under my wing on a deal-by-deal basis. Before you know it, he’s in … and I’m committed to helping him make a ton of money with me.

I’m so committed to helping my network make money that I often help them find ways to profit from deals that don’t make me a dime. For example, a member of my network may tell me about a property that’s not quite what I’m looking for, but would be perfect for a colleague of mine. So I pick up the phone, tell him about it, and make a solid connection between the two of them to complete the deal.

You see, it’s in my best interest for my network to be as profitable in their real estate businesses as possible. The more money they make because of me, the more loyal they are to me … and the more money they will bring me in the form of “home run” referrals.

No Deal Hunting or Marketing = 3 to 5 Leads Per Day?

As long as I continue to nurture my network by making purchases and helping them locate other buyers, about three to five leads come my way each day. Like clockwork.

Now, as I said, you won’t be able to build a killer network overnight. But, believe me, you can build it. Becoming a Stage Three Dealmaker is just a matter of developing solid relationships, helping those people succeed, and having the right attitude about doing deals in general. And nurturing your network takes nothing more then touching base with your partners every once in a while to see how they are doing, ask them if there’s anything you can do to help them out, or let them know that you are in a “buying mode.”

If you take the time to build your deal network, you too can make the kind of income others can only dream of. And you can position yourself to enjoy a form of “passive” deal hunting known only to the savviest real estate investors.

[Ed. Note: Steve Cook’s systematic approach to doing less work while enjoying greater financial rewards with real estate is the core of his upcoming teleseminar. Keep reading to learn how you can reserve your space for this one-time call… completely free of charge.]