After successfully flipping his first home while making just $40,000 a year, Sidney Torres got hooked on real estate. He used his profit to buy a property next door and, since then, the real estate mogul and self-made millionaire hasn't looked back.
And, when it comes to picking the right properties, Torres has a surprisingly simple method.
"A way to find really good deals in real estate is writing letters to the homeowner," he says in a new mini-series, "60 Seconds with Sidney." "I'd write 30 letters a week and I'd send it to these individuals saying: 'Your property fits the criteria properties that I like to rehab. If you're interested, call me.'"
The strategy has worked for Torres: Since his first flip, he's developed more than $250 million in commercial and residential real estate.
Reaching out to the homeowner directly gives you the opportunity to jump on properties that aren't listed, says Torres, who now helps struggling property investors on CNBC's "The Deed": "When you're getting in the business, if you can buy homes that aren't listed and not on the market, that's where the really good deals are."
In terms of which homeowners to contact, you should be looking to buy properties in up-and-coming neighborhoods — or, in the "sweet spot" between the hot spot and the fringe, he says. But don't just pick a location by triangulating on a map. It's equally important to visit the neighborhood and get a feel for it during the morning, the middle of the day and at night.
"A big mistake is not to spend the time there," Torres tells CNBC. "Just to go there during the day, when you are at work — I think that's the wrong thing to do. It's really not good if you do that because you end up buying something and end up finding out that at night it's a totally different environment in the neighborhood."
"You have got to evaluate the entire area," he continues. "You have to look at all of it."
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