How to Invest in Real Estate
How to invest in real estate? To find good real estate investments, you must train yourself to find good deals. Good deals come from motivated sellers – sellers who are anxious to sell for whatever reason. The most common ones include divorce, poor health, unemployment, death, moving overseas.
How to Invest in Real Estate: Read newspaper ads
More than half of the good deals will come from the newspaper. Look for hints of highly motivated sellers – the best phrases to look for include ‘Must sell’, ‘Make offer’, ‘Won’t Last’. Circle these ads and make sure you call them!
Properties for Rent: Other hints of motivated sellers: properties for rent – this might mean that the owners owe a mortgage but are not amortizing their property. They might be tired of looking to rent it out and be willing to sell it at good discount.
Properties for Sale: Yet another hint would be properties for sale by the owners themselves. Owners might for some reason not be able to afford a realtor.
Properties owned by investors: In these ads, you would be able to find owners who are eager to sell either because they have bombed an investment and want to get rid of it, or want to profit from rental appreciation quickly.
Invest in Real Estate: Legal Notices
Legal notices announce divorces, foreclosures, bankruptcies, estate sales. All these are reasons for urgent property sales, and will most likely involve highly motivated sellers with good deals for you.
Invest in Real Estate: Obituaries
A creative way to find good real estate deals. As Robert Shemin suggests in Making Your Fortune in Real Estate Investing, you could drop a note to the home of the deceased which says, ‘I am so sorry to hear about your loss, but if you have any property you want to dispose of quickly, I can help you. I might be interested in taking it over.’
For often than not, there will be eager sellers who just want to move out of the house as soon as possible. Some of them might say, ‘We don’t want to mess with this house. The children and cousins have moved across the country. Just take the house; you’re doing us a favor. Yes, we know we’re selling way below what it is worth, but we don’t have the time to deal with it. Too many memories. Just take it.’
How to Invest in Real Estate: Drive around the neighborhood
Drive around the neighborhood and see if you can find a house owned by a motivated seller. Take note of the signs ‘For Sale’, ‘For sale by Owner’ or ‘For Rent’. All of them tell you different things.
Investing in Real Estate: Look for neglected houses
Neglected houses are signs of excellent deals. In fact, you would find that the more the property is in disrepair, the better a deal it will be. The more work the house needs, the less likely the owner will be able to sell it to the casual seller. That’s where you come in. Sometimes, if you still find an inflexible owner, all you have to do is to just wait. As the owner gets frustrated after no one else seems to call, he will almost certainly lower the price.
Investing in Real Estate: Look for condemned houses
These homes are in even worse disrepair than those which are merely neglected. The only problem with these homes is that some may indeed be in such dismal condition that fixing up the home will be extremely expensive. Nonetheless, it is always worth a phone call – you might just find that wonderful opportunity.
Investing in Real Estate: Empty Houses For Rent
Empty houses that are for rent are usually sources of great deals. The landlord might not have been able to find any tenants for some time, and would be highly motivated.
Investing in Real Estate: Neighborhood
Pay attention to changes in zoning or additions to local infrastructure. These indicate a possibly large developmental change in an area, or the new availability of undeveloped land. Each could significantly impact property values and create fresh units on the market.
How to Invest in Real Estate
How to invest in real estate? Investing in real estate is a skill that you find develop over time. You will develop a ‘gut feeling’ for what makes a house a good deal or a bad one. That said, whenever you find a good deal, there is one question that you must always ask: Do you have any others? Good deals occasionally come together, giving you a windfall.