How to Find a Great Deal on a Rental Property

Finding a great deal on a rental property is the key to building long-term wealth and cash flow. I depend on finding properties at least 20 percent below market value for my long-term rentals. I am a real estate agent, which makes it easier to find a great deal on a house and I detail why it is important for investors to become real estate agents here. If you aren’t an agent, there are many ways you can still find a good deal including using an agent, finding deals yourself and marketing to sellers. If you would like more information on my overall investing strategy please check out my complete guide to investing in long-term rental properties.

How to find a great deal on a rental property from the MLS

The easiest place to get a great deal on a house is the Multiple Listing Service or MLS. The MLS lists most homes for sale, but only licensed agents or their staff have access to the system. The general public can see properties that are for sale on the MLS through websites like and These websites can be slightly delayed with status changes compared to MLS and they usually aren’t as detailed as MLS.

You can search these sites daily looking for a deal or you can work with a Realtor, who will search MLS. If you are just beginning to work with a Realtor, it would be wise to look at these sites to make sure the Realtor is sending listings that meet your criteria quickly. If you find yourself constantly sending your agent listings instead of the other way around, maybe you need a better agent. I have a great article on how to find an investor friendly agent here.

How to find a great deal on a rental property at foreclosure auctions

The foreclosure sale is another place to find a great deal on a rental property but there is huge risk involved. Every state has a different system for completing a foreclosure and at some point they give the public a chance to buy the property before it goes back to the bank. In Colorado, we use a public trustee who sells the property at a public auction.

There are great deals at the trustee sale, but there is a reason they are great deals. You have to have cash to buy the property, which means you are given two hours to come up with your full bid amount. In some states you have to prove you have the cash before the sale or bring the cash to the sale with you. That entails bringing stacks of cash or cashiers checks with you to every foreclosure sale, whether you buy a property or not.

Not only must you have cash, many times you cannot see the interior of the property before you bid. The home may be vacant, but it is not legal to trespass if you are not the owner of the home or have permission to enter. If the home is occupied, you need to find out who the occupant is. If the property is occupied by a tenant and they have a valid lease, you may have to honor that lease. If the occupant does not want to leave, you will have to evict them through legal channels. Here is a great article on how to repair a rental property.

I don’t need to tell you the risks of buying a home without seeing the interior. The biggest risks come from plumbing leaks, mold or drug houses. If you are lucky enough to buy a meth house, the entire interior may need to be gutted and rebuilt, including HVAC, kitchen cabinets, walls doors, floors and more. We unknowingly bought a meth house at the public trustee sale that ended up burning down!

Another major issue is the public trustee does not guarantee clear title; you may be bidding on a second loan thinking it is a first loan. I have seen investors who thought they just bought a house for $50,000, only to find out there was a $100,000 first loan on the property they are now responsible for. There is no guarantee the taxes, utility bills or liens are paid off. In Colorado some HOA dues, water and taxes survive the foreclosure. An O and E (ownership and encumbrance report) from a title company, will give you an idea of what liens are against the property, but does not guarantee anything.

For Sale by Owner listings can be great deals for rental properties

Properties that are for sale by owner (FSBO), can be a source to find a great deal on a rental property. Checking the paper every day and driving around neighborhoods you want to buy in, are great way to find FSBOs. Craigslist is another great place to find FSBOs, although it is getting more difficult as more agents are using Craigslist to advertise MLS listings.

FSBOs are usually trying to save money by listing the home themselves and avoiding paying a real estate agent’s commission. Sometimes the properties are priced well and sometimes they aren’t. If you do find a great deal and want to close on it, you can usually find a Realtor who will do the paperwork for a minimal fee. It is smart to involve a professional when making a large purchase like buying a house!

Other investors, friends, family can help you find a great deal on a rental property

Word of mouth is another way to find a great deal on a rental property. Some owners are sick and tired of their homes and want to get rid of them, but are too busy to actively sell the home. They have been waiting for the right person to come along and take the property off their hands. Tell everyone you know that you are looking for investment property. We have agents or business associates send us leads on possible deals all the time because they know we are looking for deals.

How to find a great deal on a rental property at auctions

There are many online auction sites that sell foreclosed homes. A few sites to watch are, and There can be a great deal on a rental property on these sites, but read the small print. Some of the homes are occupied, some sellers don’t offer title insurance and many auctions require cash.  Many auctions also do not advertise their listings in the MLS or on other online sources. You may have to check these sites regularly to find homes in your area.

How to find a great deal on a rental property through direct marketing

Direct marketing is a tactic many investors use to find motivated sellers. Direct marketing includes mailing to sellers in foreclosure,\ who may live out-of-state or who may have inherited a home. Many investors put up billboards, advertise in the local paper or use Craigslist to find motivated sellers. The “We buy ugly houses” company built a franchise on finding motivated sellers. This can be a very successful tactic, but takes a lot of time and money. I have started using direct marketing, but have yet to secure a great deal on a rental property using this technique. and US Lead List are a couple of places to find leads on absentee owners and inherited properties.

Non Performing Loans can be a starting point for finding a great deal

It is now possible for investors to purchase loans from banks. Many banks are selling packages of their loans. Hedge funds are a major buyer of banks’ performing and non-performing loans. Some of the hedge funds will then sell off loans to buyers. The individual buyer then has control over the loan. They can modify the loan, allow a short sale or foreclose on the loan. It takes a lot more work than a regular purchase, but this is another way to get a great deal on a rental property. Here is an article with much more information on non performing loans.

REIA’s are an indirect way to invest in real estate

REIA stands for Real Estate Investor Association and they are local clubs for investors who fix and flip, buy and hold or wholesale properties. These clubs can be a great source of information.  You can develop contacts with people and members even advertise properties they have for sale. I have met many wholesalers and many great contacts at real estate meet ups. Even if you do not find a great deal on a rental property, you are sure to learn valuable information.


There are many ways to find a great deal on a house. It is getting harder to find deals on the MLS, but it is possible with hard work and quick acting. If you are having a hard time finding properties, consider some of these other strategies. They may just help you get a great deal on a rental property or a fix and flip.

For more information on finding awesome rentals or flipping homes. Check out my best selling books on Amazon:

Build a Rental Property Empire

Fix and Flip Your Way to Financial Freedom


  1. investfourmore October 17, 2013
  2. Mayfet Rusalda September 11, 2013

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