Location A Good Real Estate Investment 101
There are so many ways to locate real estate one can easily loose focus in direction but a good place to begin your search is the newspaper. The best properties to negotiate are For Sale by Owner properties due to no realtor fees and you are dealing directly with the homeowner not a third party.
Begin your search with this group of sellers searching the classifieds for ads that give you hints as to the owner’s motivation. You want to look for financially motivated sellers. LOOK FOR KEY WORDS IN CLASSIFIED ADS
Like:
Out of Town Owner
Foreclosure
Will Sacrifice
Price Reduced
Must Sell
Moving
Job Relocation
Below Market
Below Appraisal
Divorce
Reduced
Make Offer
Nothing Down
Bankruptcy
Non-Qualifying Loan
For Sale By Owner (FSBO)
Distressed Property
Illness Forces Sale
Repossession
Desperate
Motivated Seller
Handy Man Special
Investment Property
Estate Sale
Foreclosure
Needs TLC
Bought Another House
Seller Anxious
These words identify motivated sellers. You cannot afford to not use this source! Also searching the deeds office will determine a financial motivation by looking at any form of notice of default filed on the subject property at any time during the homeowners ownership of the subject property.
Most homeowners who have faced financial distress at any time in their life will normally face it yet again unless they have learned to manage finances better. Many do not.
You will also want to search the Homes for Rent section of the newspaper as these properties in some cases are being rented because the owners were unable to sell the property and need a monthly cash flow to pay the mortgage. If you ask questions like:
Would you consider a lease option purchase? Would you consider owner finance? Would you consider selling for cash for a little discount?
Yes you will get some no's but that's ok as it only takes one yes to make you profit.
Specific neighborhoods are a good place to look as well. Drive through the neighborhood and look for ‘For Sale by Owner’ signs, vacate properties, properties for rent and so on. You will find many. You can also call on properties that are being offered by Realtors, you must realize Realtors will complicate the negotiations and want a healthy commission for their efforts.
You can also find many deals from the following sources.
- Realtors & Realty Firms
- Newspapers, Sunday is typically the best day
- Real Estate Magazines. Usually available at supermarkets, book stores, libraries, etc.
- VA, FHA, HUD, FHMC and FNMA local offices. These agencies will have a web site on the Internet with homes for sale.
- Government auctions – Absolutes
- Courthouse / Recorder / Registry of Deeds
- Trustee / Sheriff Notice of Sale or Suit
- Trustee’s / Sheriff’s Deed Under Foreclosure Sale
- Phone Book
- Builders
- Investment Companies
- Property Management Companies
- Lenders - REO (Real Estate Owned) departments; check with banks and savings and loan associations
- Attorneys – trusts and estates
You should have a reasonable idea of what to initially look for before hitting the streets. You want to sell the property within a reasonable amount of time for that fast cash profit, seek out the average home.
- Stay away from the high end of the market.
- The smallest house in the area.
- The biggest house in the area.
You will find that your holding time can be unreasonably lengthy at times in dealing with the above three areas and that cost you profit. A beginning real estate investor can get distracted from the ideal property to buy and resale. Perhaps the low price of a fix-up property or the potential windfall of a high priced property is tempting. Realize you can make money in the both markets, but the easiest place is in the mid range markets.
Also the low end of the market you may want to avoid unless you have the time and expertise to spend on a fixer-upper.
- We care neighborhoods
- Minimal to no construction – unless you are handy with repairs
- Cosmetic repairs only – paint, carpeting, lawns and clean up
- Middle range – or Lower range not the top of the market make the best investments
This will provide you with the fastest turnaround of profits!
Keep your no or not interested leads and put them aside for several months. Then contact the owners. If the property did not sell, rent or a deal fell through, you now most likely have a motivated seller. Keep a database of old properties in like excel to automate your process.
To your success!
Comments(0)