Simple Tips for Finding Incredible Real Estate Deals

Simple Tips for Finding Incredible Real Estate Deals

Real Estate: When I was a kid, every Saturday morning was the same: Get up early, pile into a minivan with my mom and three siblings, and start looking. . . garage sale! Yes. I was raised by a “garage mom”.

Since we didn’t have much money, we bought almost all of our clothes, furniture, toys, and basically everything else from someone who no longer wanted these things. And let me tell you – my mom was a master at those sales. She knew how to find the coolest gadgets, toys, games, and appliances for pennies on the dollar. She could trade a 50-cent t-shirt down to 10 cents and she did it regularly. She would even buy way more than we needed just so she could sell these things in her own garages and make money to fund our family vacations.

Today, I garage shop a lot less than my mom did, but the lessons I learned from her haven’t changed. I still want to find a lot. Today, though, instead of fifty-cent t-shirts, I spend most of my time hunting down great real estate deals because I’m a real estate investor.

Whether I’m planning to flip that house, rent a property, or go into something completely different: Everything starts with a lot. Here are four simple tips you can use to find better deals on your own property, whether you’re looking for an investment, a property for your business, or simply a home for your family.

1. Consider buying a foreclosed property.
When someone defaults on their mortgage for an extended period of time, the lender eventually takes ownership of the home and evicts its occupants. Once the home is vacant, the lender will typically list the home for sale on the market using local real estate.

While foreclosure itself is obviously sad (no one is happy when someone loses their home), once the deed is done, these properties can be some of the best deals you’ll find in real estate. Banks want to be in the business of lending money, not asset management, so they are often quick to offer deep discounts just to get business off their books. Translation: You can get a lot on foreclosed properties if you know how to buy a foreclosure right.

Since the foreclosure process can take several years, these properties often need some serious repair or updating. So additional discounts may be given as compensation – for buyers who are willing to resist rehab.

Talk to a local realtor about foreclosures in your area and start looking into some. You might be surprised at the deals you can get.

2. Be the first. . . or the last one.
In reality, the old saying often applies: the early bird gets the worm.

It is often not the highest offer on a property that is accepted, it is simply the first. Therefore, if you are looking for a great deal, hurry up! Get pre-approved by your bank so you can jump on any property right away, and have your realtor set up automatic email alerts to notify you of every new property that comes on the market.

Conversely, another way to find great deals is to look for properties that have been on the market for a long time. Those owners are often much more willing to sell at a discount because they are tired of holding onto the property. Many times they will pay two mortgage payments a month (or years) and will be happy with almost any offer.

3. Approach absentee owners privately.
In a hot real estate market like the one most of the United States is experiencing today, it can be hard to find great deals due to the large number of people looking for a home. In some areas, a single home for sale can get a dozen or more offers in the first few days.

That’s why one of the best tactics real estate investors are using today is to look outside the multiple listing service and instead contact owners directly to ask them to consider selling. At any given time, a good percentage of the population will entertain this option, so why not approach a real estate agent before listing a home?

One of the best types of people to target are absentee owners, which simply means someone who owns the property but doesn’t live there. They can be landlords (who hate their tenants) or owners who have inherited their houses and are simply not sure what to do with them. You can find these offers in a number of ways, such as:

drive through, looking for houses that look vacant and using online public records to track down owners
purchasing a public listing using an aggregator site such as ListSource.com
calling landlords who offer properties “for rent” on Craigslist. Let them know that you are not interested in renting, but would like to talk to them about buying.
4. Look at lots of offers.
Finally, understand that finding good deals is largely a “numbers game.” You often have to kiss a lot of frogs to find the prince!

For me, I look at offers from a funnel perspective. At its top, many downspouts come in, but only a few come out at the bottom. So if I want more offers at the bottom, I need to improve every aspect of the journey, including the quality and number of leads at the top. For example, my path might look like this:

Raw information from my real estate agent — 200
The place is somewhere I would buy — 100
A quick analysis shows promise – 20
Deeper analysis still shows promising – 10
Bids I have bid on — 8
Offers I have made that have been accepted – 1
Note that in the funnel above, my agent sent me 200 possible properties, but I ended up only offering eight and only one offer was accepted. If I wanted to buy two properties, I know I would have to look back at my funnel and find a way to increase my numbers. Because again, it’s just a numbers game.

Albert John

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