Real Estate
Investment
Tips to finding a good deal in Real Estate
Property Investment
One of
the sure shot ways to becoming successful in the real estate property
investment business is for a thriving real estate investor or retailer to
be able to solve a lot of other people's problems. The more knowledge,
ability, experience, contacts, and resources you have, the more solutions
you can begin to offer people in solving their problems and thereby solve
your own as well, in the light of learning from others' mistakes. Apart
from this, you will be ahead of the rest if you can get people calling or
coming to you with their specific problem first. This also implies that
you have to advertise the fact that you are in a position to help while
being fair, trustworthy, and accurate in making quick decisions before
competitors triy to persuade these people before you can get to them.
It is important to
understand marketing for the above reason alone - competition. That means
deciding on what you are going to specialize in and developing a method to
define your target audience, before attracting them with a well-written
message using the different types of media to get the word across.
This aspect in turn
brings up a valid point:
Choosing the exact
realm of operation that you would want to specialize in: following are
some categories from which one can choose from:
o Condominiums or vacation
property
o Single-family homes
o Commercial buildings like
hotels/motels, strip malls, office complexes, mobile home parks, storage
units, parking lots, garages, restaurants, stores, apartments for five or
more families, and so on
o Farms either commercial, industrial,
or agricultural, depending upon zoning
o Apartments for one to four families
which can be a residential duplex, triplex, etc.
o Raw land which may be lots,
vacation, recreational, sub-dividable residential, commercial, industrial,
agricultural, and special purpose
o Industrial premises like factories,
refineries, manufacturing plants, and so on
o Special purpose premises like
churches, schools, hospitals, power plants, theaters, sports arenas, golf
courses, marinas, and so on
Here are a few
examples of how you could go about finding a good deal:
o Make it a point to look at
bulletin boards, local papers and small independent publications; this
goes for every publication you get and also ensure you get one of the
first copies off the press. Go to the facility that houses the presses and
get your copy before the ink has a chance to dry if possible! Let no one
beat you to the punch.
o Better still, advertise yourself and
get people who are considering selling to call you before they actually
tell the rest of the world through an advertisement.
o Look at the legal section of
newspapers and contact heirs and attorneys, as well as sales in the garage
or estate sale sections. Also, 20 percent of people who have garage sales
are usually ones who are planning on moving soon. Ask about their house or
their neighbor's homes; in other words ensure that you always keep your
receivers and antennae up! Your odds of success increase if you choose
largely populated centers and remain in the market constantly on the
lookout for your kind of deal.
o Identify vacant houses that
are run down, fire damaged, or abandoned, where city notices are evident
and talk to the neighbors near these homes since they usually know who
owns it and what is going on. They also have an interest in seeing it
restored to beauty. It sure is a drawback you cannot simply look in the
mailbox to see who is receiving mail at the property in question, which
would have been a lot easier! Instead, walk up to the abandoned property
and look in a window to confirm that it is indeed vacant, of course by not
endangering yourself by getting bit or shot! Common sense comes in handy
here; contact out-of-state owners through property records or else by
letter and / or phone. Better still, leave your visiting card on the
door.
o OREO stands for Other Real
Estate Owned; make friends with your local lenders and let them know that
you are the one to call when they have an impending foreclosure in
progress. If you do pre-qualify with lenders beforehand, they may call
even you sooner.
o Watch the local paper closely
for foreclosure auctions, tax sales, as well as HUD and VA listed
properties. Auctions held in bad weather conditions where the property
must be sold urgently are your best chance to limit competition and buy
the premises at rock-bottom prices. Since there is no reserve or low limit
on what can be accepted chances are that you may win big.
o Real estate agents are surely
going to try to sell you something; it is hence important to be very
specific with them when you approach them, and tell them to call you only
if they have a good deal. Ask agents to give you the expired listings that
they couldn't sell and offer a 2 percent commission if they will assist
with closing the paperwork after you clinch the deal with the seller on
your own.
o Avoid being very selective in
case the property is an absolute steal; quickly lock it up and sell it to
somebody who does like to work with that type of real estate. Get the
option as soon as possible and hand it over to another buyer; then look
for distressed sellers in addition to distressed property.
o Post fliers in every place
where you think there exists a possibility to rope in leads like laundry
shops, shopping centers, bowling alleys, colleges, public bulletin boards,
churches, local businesses, etc. in short, wherever large numbers of
people tend to congregate. Give them a chance to give you a lead on a hot
deal and in return hang a juicy carrot in terms of a small cut out of the
deal. For instance, printing up cards that say that the lead provider
stands to be paid well, say $500 at closing if the property that they
recommended does get closed eventually and so on. Also leave contact
details for them to contact you if they do know anyone who is selling
property. Always print quality business cards and provide easily
contactable numbers or addresses so as to make a good impression on those
who do decide to help out. This would in turn rope in more leads based on
the good word of mouth.
o Have a minimum of 10,000
business cards printed with your offer of the payout for successful leads
hand them out in stacks to almost everyone you can.
o Join organizations of all
types; remember that the sky is the limit since there are so many - simply
pick the ones that you would be interested in truly being a part of and
let it be known that you do pay handsomely for closed deals.
o If you do use headhunters,
ensure that leave out none. Always remember that property managers, moving
companies, neighbors, landlords, tenants, the mailman, relocation
services, the paper boy, gardeners, landscapers, pest control people,
friends, acquaintances, relatives, service technicians, and other
investors are all equally potential lead generators.
o In short, everyone should
know they can make good money if you end up buying a property they tell
you about. Document and maintain lists of willing people and prioritize
them so as to give them appropriate amounts of motivation; also give each
of them stacks of your business cards for exponential growth.
o Water, gas, and electric
company personnel who shut off utility meters can be very good birddogs
when it comes to finding property that is in trouble or vacant and hence
you must ensure that they have your cards.
o As you grow, you can use your
imagination. You might want to consider TV, radio, phone books, street
benches, billboards, bumper stickers, and bigger commissions to spread the
word around. Put up signs in all conspicuous places informing people that
you deal in real estate investments.
o Make numerous but small
offers on overpriced properties and walk away. It is not advisable to
deposit earnest money with them; they may stew on your offer and call you
a month later accepting your deal. It is hence important to leave the
offer with them.
o Older people should not be
left out since they are very valuable informants. They know everything and
need people to talk to, so the best thing would be to simply listen to
them.
o Go to free seminars on real estate
since by doing this, you will not only to learn about real estate but also
to capture names and circulate your own among like minded people. Once you
have their names and contact details, call your own club meeting and
network for prosperity, you might also find a suitable mentor
here.
o Go to places where people are
buying those 'by owner' signs and ask them what they are selling. Follow
them home and get the first look, since being first is usually important
for you to be able to close the deal faster; otherwise chance are that you
will lose the deal.
o Try offering 15 percent less
than what you intend on paying. A shot in the dark as it may be, if they
do accept it, you might make a good margin. In case they don't buy the
idea, you can still negotiate up to 15 percent more and get it for what
you originally were ready to pay. If it's any higher, walk away but ensure
you leave the offer on the table for them to contact you in case they
change their mind.
o Always make your offer easy
for the seller to understand. You may get the option to buy but it is wise
to use a contingency to protect yourself. You surely can iron out the
details later but it is important to lock the deal up now.
o Try and buy from sellers who
tend not to care for the property like seized or foreclosed properties or
real estate owned by corporations, non-profit organizations, disinterested
heirs, probate attorneys, and other tax sales and private
auctions.
o Also do try helping someone to sell
his or her property even if you don't really want to do it; simply be a
friend and offer to help for nothing in return. You will be surprised at
what happens when you sincerely try to help without any thought in mind of
making money; this can be a major motivating factor too.
