In a perfect world, making money from investment properties would work something like this every time: You’d find homes at below market value and sell at a profit.
In reality, finding homes at below market value is a much more complicated proposition. It’s not impossible, but it is something that requires a lot of work, patience, researching and networking on the part of the investor.
Here are a few ways to find homes at below market value:
1. Check public records
From the ads in your local newspaper to your county government website, public records are a fantastic resource for finding foreclosure properties, and thus, finding homes that are below market value.
2. Put your name out there
In some cases, finding investment properties means telling the world you exist. Some property owners might be thinking about offloading their homes but haven’t yet begun the process of selling. By advertising your services – online, in newspapers, through direct mail – you can put your name out there and find these sellers.
Homeowners who see your “I’ll buy homes for cash” ads and are interested will get in touch. Just be sure you have a solid strategy for the property so that the sellers know they aren’t wasting their time.
3. Real estate auctions
This is a great method for finding homes below market value, provided you do your homework about the neighborhood and nearby amenities to help you avoid overpaying when the auction begins. When you have a good grasp on the value of properties before the auction starts, you’ll be able to find homes below market value.
In any endeavor, the question of who you know is often as important as what you know. Investing in real estate is no different. By building up a network of professionals in the real estate industry, you have a better chance of finding homes below market value.
These professionals can include:
- Real estate attorneys – Attorneys who handle real estate cases typically have a good handle of properties that are on/about to go on the market and can tell you about sellers who need to come up with cash quickly.
- Contractors and tradespeople – Not every real estate project gets completed. Sometimes, investors run out of money. By knowing the people working on these projects, you can get the inside scoop on projects you might be able to complete yourself.
- Property wholesalers – A wholesaler is someone who buys a home from a seller and then finds a new investor to buy it for a slightly higher price, with the idea that the new investor – meaning you – will be able to realize an even larger profit after making repairs.
Need help finding homes at below market value?
Are you looking to boost your real estate network? The Diversified Real Estate Investor Group can help. Our members include full-time and part-time real estate investors, along with real estate brokers, attorneys, agents, property managers, appraisers and bankers.
We give investors like you the tools to hone their skills and learn practical knowledge of real estate investing and management. Come to our next meeting to find out how we can help you succeed in landing your next property.