In order to make a profit in real estate investing, you must have a continuous flow of good deals. What this means is that you must buy your houses low enough so you can make a profit.

So how can you buy houses at prices low enough to make a profit?

1) Motivated sellers
This is my favorite source of good deals. It is still the most favorite method of getting deals that never find their way into the open market, way below market value.

A motivated seller is the one that really needs to sell their house. Usually, they could be behind on their mortgage, facing foreclosure, divorced, burned by bad tenants, have inherited property, and so on. They can do anything to get rid of these properties which have become a big bother in their lives.

So how do you find motivated sellers?

You simply need to market to home owners who are in legal trouble. In my local area, I get a listing of all filings in the county court system every day. If they own real estate, they get into my mailing list.

The leads I get out of these are very motivated and are ready to do business today.

2) Wholesalers
Other real estate investors that sell houses at wholesale prices form an alternative source of cheap houses.

I get lots of good deals most of which I cannot pursue. I just wholesale them to other real estate investors who then put them back in the market.

When you buy a wholesale deal, you can buy the house in a simultaneous closing or take over the contract to buy the house. Check our other articles for details of these transactions.

3) Local REI meetings
I can bet there is a group of real estate investors who meet near where you live. These are people who buy and sell real estate actively in your local market.

If you are looking for good deals, this is the one place you are likely to find them.

4) REOs and the MLS
These are not the most profitable deals you can find unfortunately. The asking price is usually too high for most real estate investors even though thousands of properties are sitting out there with no buyers.

This is because they are too over-shopped and price breaks are not that high.

These are the deals I recommend the least for investment purposes.

5) Courthouse auctions
You might need to do a lot of home work to get good deals in courthouse auctions. I do not recommend this method unless you know what you are doing.

6) Craigslist and other online sources
Again, good investment deals are rare here because the resource is too over-shopped and most Realtors and FSBO owners advertise here. It is not easy to get a good deal from Craigslist.

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