Find Smart, Sexy, Somewhat Inexpensive Deals
Find Smart, Sexy, Somewhat Inexpensive Deals
Investing in real estate is becoming increasingly popular, especially in recent years, with people from all walks of life getting in on the action. As a real estate professional, though, you’re in an especially ideal position to jump in. You’re familiar with the housing market and well acquainted with available local properties. You’re also well-versed in potential pitfalls to avoid in the purchase process. And access to the MLS can’t hurt.
But that’s not all you need to be successful in real estate investment. To help you get off to a great start, here are some tips that will help you to find, and negotiate your way into, great investment opportunities.
How to Find Great Investment Properties
- Set Your Criteria. Be clear with yourself about what type of investment you’re after. Buy and hold? Fix and flip? Rentals? Knowing what you’re looking for allows you to educate yourself on that particular type of investment, helping you to spot properties that meet your criteria. One of the best ways to make money in real estate is to find something that’s a great deal —perhaps it’s listed below market value or in an up-and-coming housing market. If you’re looking for something you can rent out, you may want to consider purchasing something that’s turnkey and ready to go. Otherwise, you must calculate the time that it will sit empty while you make repairs and fix it up. But no matter what the type, ensure that your investment will be able to offer long-term revenues.
- Get the Word Out. Use your connections! And start making new ones. Let your sphere know you’re looking for properties, and start networking. Talk to other real estate pros, local bank managers, chambers of commerce, and even property managers you already know. For new contacts, find ways to make yourself stand out from the already crowded investor market. Take them out for coffee or lunch, or introduce yourself by giving them your business card along with a small token; some chocolates or other treats would help to make you memorable. Online, you could run ads describing what kind of property you are looking for in Craigslist’s Housing Wanted section.
- Search. Of course, the MLS is your best friend — and a great master list. But don’t forget to check out other resources too. Grab local newspapers and check out bulletin boards around town. Search websites such as LoopNet.com, CommercialSearch.com, or Auction.com. When you’re out and about, keep your eyes peeled for properties that are advertised as for sale by owner. Keeping yourself in search mode at all times will help you spot great deals when they come up. Also, pay special attention to listings that may be stale. You may be able to negotiate a better deal for a property that’s been on the market for a while. Look for properties that have been listed for over a month — at this point, sellers will be more motivated to sell.
How to Win the Property You Want
- Hone Your Negotiation Skills. If no deals are to be found, create your own deals by negotiating. After all, if you want to find bargain properties, you’ll need to know how to drive a good bargain. Look for properties that are off the beaten path. The owners may be more willing to negotiate if their property isn’t getting much attention. Meeting up in person can also help increase your chances of securing a good deal. Ask the sellers what they’d be willing to sell for if you could close the deal within 48 hours. Let them name the first price — you never know; you might be surprised by what they’re thinking. If all else fails, set your price and stick with it. Determine how much you’re able to pay for the property in order to make a profit, and don’t pay more than that.
- Seek Out Power of Sale and Foreclosure Properties. Search for online foreclosure lists. You may have to pay around $30 per month for access, but it’s worth it if you’re serious about investing very soon. While power of sale and foreclosures are quite similar, there are some distinct differences between them. With power of sale properties, the home owner’s name usually stays on the title until the sale, but with foreclosures, the lending institution is the only one on the title. Foreclosures usually offer the best chance of a deal, since the banks are usually interested in unloading the property as quickly as possible, but it’s worth checking into both options.
- Stick to Your Plan. When you find a hot property, chances are there will be a lot of competition. This is especially common in power of sale properties or foreclosures. It’s important to avoid getting caught up in the flurry. Make an offer that you’re prepared to uphold, but don’t get emotional just because there are other buyers. In the case of foreclosures, drive the point home about your ability to close quickly, allowing the bank to get the property off their books sooner.
- Watch Out for Fool’s Gold. Beware of bad deals disguised as bargains. Just because someone sounds desperate doesn’t mean that they really are. Try to view each property objectively, weighing them against your investment criteria so that you’ll be able to make an informed decision.
- Become a Specialist in Your Area. Avoid spreading yourself too thin. Get to know properties around you and you’ll be able to spot whether something is a good deal or not. While there’s success to be had in markets outside your local area, smart investors learn the ropes by investing locally.
- Have a General Contractor Look at the House With You. Finally, it’s always a good idea to have a general contractor in your contact list. Bringing them along to look at potential properties will alert you to potential issues with the home, and fill you in on the extent of the problems.
In the end, remember that the best venture is the one that’s going to offer you the highest rate of return. In order to make that happen, you’ll need to find a great bargain –this usually means buying property that’s underpriced, in an area that’s poised for growth. Look for deals, and don’t be afraid to make your own bargains by negotiating.
Remember: It’s your money. Be careful about where you want to invest it, and pay special attention to the profitability of your strategy. While some real estate professionals find success with house flipping, others turn to rentals for short-term cash flow as well as long-term gains. Cheaper isn’t always better, but always but steer clear of overpriced properties. Allow your experience in the industry and your familiarity with the local market to propel your success.