For the savvy investor, there is a great deal of money to be made in the real estate market. If you are planning to invest in real estate, one thing you will want to do is to work with a reputable real estate professional who can provide you with information on the area’s comparable sales. Believe it or not, finding phenomenal real estate deals is actually easier than you think. However, it does take good information and background to make it happen.
1. Find a Real Estate Professional who has done this before….representing you as an investor and start looking. A seasoned Realtor who represents investors is persistent and committed in looking for them. He/She will provide you with a tremendous amount of information including how long a property has been on the market (often an indication about how “flexible” a seller might be). Remember the old adage: Information is power and without the right information you will be ill equipped to negotiate.
Often people think coming up with “cash” is the answer. A seller knows that if a purchaser is a prequalified buyer, all transactions are cash in the end….even if some of that cash comes in the form of a mortgage.
2. Partner with your Realtor – If you want to find some of the best real estate deals out there,focus on a neighborhood that is convenient. If you are going to purchase rental property and something goes wrong at 4 AM you don’t want to travel an hour to be there. While you may find some “deals” with stressed properties, your realtor will guide you through the difficulties surrounding “short sales” where people owe more than there homes can realistically get. Some Realtors specialize in short sales, so if that is what you are looking for, investigate that your Realtor is qualified and familiar with the extended drawn out process.
3. Foreclosures and Tax Sales: As in short sales, foreclosures and tax sales are a tricky game. It is particularly necessary to work with a professional who has done this before. Some states have tax sale clawbacks….And, on a foreclosure you absolutely need to be certain that the bank has properly filed the correct paperwork and that your title will be clean and easily transferrable when you decide to sell. Presenting clean title on a resale that began its life as a foreclosure has already begun to be a significant problem in certain areas.
4. Mailing Lists - Many times realtors will send out flyers or postcards to various places in a certain areas with which they are familiar, but more often it is through networking with other real estate professionals at meetings and get togethers, that they will be made privy to what has not yet come on the market which might be just what you are looking for. Today, though snail mail is used, it is the well connected, well networked realtor who finds the property.
5. Ads - Long ago, people placed newspaper ads and tacked up “We Buy Your House For Cash” signs, stating that they were looking for properties. It didn’t take long for the public to realize that often, people were looking to pay them a fraction of what their homes were worth. When working with a Real Estate Professional that agent often networks at meetings with other professionals who have a “Wants and Needs” segment. Someone at that meeting might have just the property you want…. In addition, Realtors have long standing connections on whom they can call when looking for a specific type of property.
Investing in real estate is a way you can diversify your portfolio…..BUT a mistake can be very costly. Make certain the first step is to contact someone who has either been personally referred to you or someone who has an investment philosophy that is a good match for you.