If you were to poll a random sample of 100 ultra-wealthy individuals, you’d find that the majority of them are involved in real estate investing (in at least some form or fashion). But you don’t have to be a one-percenter to get your feet wet in the world of real estate. It’s all about being smart with the deals you pursue.
Here are a few techniques you may find helpful:
- Look for Foreclosures
Don’t thumb your nose at foreclosures. While the average buyer doesn’t want to deal with the hassle of a foreclosed property, this gives investors like you ample opportunity to secure cost-effective deals.
Because foreclosure processes can take years to unfold, these properties often need a bunch of repairs. This can further reduce the price the bank is willing to accept and may allow you to secure an impressive deal (so long as you’re willing to rehab it).
While you can technically find your own foreclosure deals online or at the courthouse, it’s smart to partner with a local real estate agent who understands this niche and can streamline the process on your behalf.
- Study Auctions
Real estate auctions can be another profitable endeavor. The problem is that you’ll likely encounter very experienced auction buyers who understand the ropes and have the skills to beat you. You also have to be willing to forgo things like inspections and traditional due diligence. (This is why it’s often recommended to hire a professional to go to auctions in your place and find/bid on deals for you.)
- Find Unlisted Properties
When a property is listed on the market, it’s you against everyone else. And in a seller’s market, you’ll often end up overpaying. But if you can find unlisted properties that an owner is willing to sell, you stand a much better chance of securing a profitable deal.
Here are a few ways to find unlisted deals:
- Drive around and look for properties that appear to be in distress. Signs include an unkempt lawn, dilapidated exterior, newspapers piling up in the driveway, etc.
- Purchase a public record list using a website like ListSource.com.
- Call landlords with properties for rent signs and ask if they’re interested in selling.
This can be a time-consuming process, but finding a deal makes all of the hard work worth it.
- Be Smart With Financing
The financing you choose to go with will have a direct impact on the profitability of your deals. Be smart about how and where you shop for loans.
Source home loan rates from as many different places as possible and be certain you’re comparing apples to apples. Rates are super competitive right now and savvy investors can use this to their advantage.
- Work With a Wholesaler
It’s always nice to network with real estate wholesalers in your market. Their entire business model depends on finding excellent deals and then optioning their contracts to interested investors. While you’ll pay a little bit more than you would if you found these deals on your own, they are still excellent opportunities (and require just a fraction of the time commitment and due diligence).
- Become an Expert Negotiator
You can hire people to do almost anything on your behalf, but negotiating is one of the skills that you absolutely must cultivate during your career. If you can learn to become an expert negotiator, you’ll stumble into good deals right and left.
The best way to become an expert negotiator is to observe others and try their methods for yourself. You might fall flat on your face a few times, but the firsthand trial and error will give you the experience needed to succeed.
Patiently Wait for the Right Deal
If finding deals on properties were as easy as conducting a quick search on Amazon and clicking the “buy now” button, everyone would invest in real estate. The most successful real estate investors are often the ones with the most patience, discipline, and intestinal fortitude.
You must be willing to wait for the ideal property to come along. Sometimes it can happen in a matter of days, while other times it takes months of searching. Patiently wait for the right opportunity and you’ll reap the rewards for years to come.