If you’ve done your homework and identified the types of investments you’d like to make as well as where you want to invest, you’ll agree that a good real estate deal means different things to different investors. A conscientious investor will create a plan and identify his or her target market, then exercise self-discipline and stick with the plan.
Knowing what you want and acting on a targeted opportunity will both minimize your risk and maximize profit. Where do you look for these types of opportunities? Sometimes they fall into your lap, but most of the time if you develop a good system for prospecting you’ll know where to look for them.
For instance, if you prefer investing in heavily distressed properties, and make money by repairing and flipping—or just flipping—lucrative deals can be made with private sellers. As long as you know what to look for, it’ll be easy to move on to the next step.
Look For Clues
If you’re paying close attention you can happen upon your ideal investment while driving through a particular neighborhood. Once you get to know an area, you’ll notice subtle changes in the properties if and when they happen. By the way, when you locate a potential investment property, don’t commit the address to memory thinking you’ll go back later. After a while everything looks the same. Jot down the address and do a little research. Knowing what to look for is important.
If you’re a repair and refurbish investor, you know that physically distressed properties leave very obvious clues. Because you know what to look for, these properties will stand out; setting your potential investment property apart from the rest. Here are a few examples.
Broken doors or window shutters, peeling paint and overgrown landscape are a few signs of a home that isn’t being well-cared for. Although these might also indicate an absentee owner or resident who doesn’t keep the property up appropriately, you’re at the very least, on the right track. The likelihood of coming into contact with a motivated seller leans a little bit more in your favor with this type of property.
Homes that are left vacant or appear abandoned are prime candidates for a check-in with the property owner. The property might be in great shape—just empty. The property might have been inherited by an out-of-state relative or part of a divorce settlement. In some cases, escrow closes on a new home before the older home is sold and the owner is forced to move out. Motivated Seller! Who wants to pay two mortgages?
A conscientious investor will create a plan and identify his or her target market, then exercise self-discipline and stick with the plan.
There’s an old saying credited to Hall of Fame NFL Coach Jimmy Johnson: when preparation meets opportunity, success is inevitable. As a real estate investor, preparation is critical. Four things you should always carry with you:
- Business Cards
You never know when you might meet a motivated seller
- Camera/cell phone
Camera: For pictures of prospective investment properties
Cell Phone: To call on homes listed for sale by owner
- Flashlight and Batteries
In case it gets dark, or when scouting out abandoned properties
- Notebook and Pen
Write down addresses and take notes on potential properties
There are plenty of opportunities out there. Be prepared. Remember, a good real estate investment means different things to different investors. What does it mean to you? Know what you want, determine what you’re looking for, and stick to your plan.