Finding and then capitalizing on good deals are key to successful real estate investing. The most important thing is to do your research to ensure that you are making an informed and wise decision. Finding good real estate deals can be accomplished by:
1. Looking for Motivated Sellers – The main focus of your search for good real estate deals should be to find motivated sellers. Motivated sellers need to get rid of the property quickly and are willing to sell for less. These types of sellers are motivated by a number of factors that may include divorce, death, bankruptcy, and job loss.
2. Farming the Entire Area -Focus your research on an entire area rather than a specific neighborhood. If everything in the area is going for 50 dollars per square foot and you identify a property that is $20 per square foot, this is a deal that is worth looking into. The key is to learn how to recognize a good deal.
3. Focusing on the Deal Itself – While specific neighborhoods should be considered when searching for good real estate deals, the entire search should not be focused entirely on that one neighborhood. Neighborhoods are not the driving force behind good real estate deals. The deal itself is actually the most important factor.
4. Getting it Under Contract – Successful and seasoned investors know the importance of acting fast when they identify a good deal. It is a very common practice to put a property under contract before even viewing it. This quick action allows successful investors to capitalize on good deal opportunities.
Skeptics and newbie investors view this action as reckless. It’s important to note that the contract should give the investor enough time to perform necessary due diligence with the option to walk away if any problems are found. In order to be sure that your interests are protected, always consult a real estate professional or attorney.
5. Performing the Due Diligence – Once the contract is signed, set your internal clock ticking and arrange to spend the necessary money to determine if it is a good deal. Do the least costly inspections and investigations first with the more costly inspections aft wards. This will save you money throughout the year. Make sure to use a certified inspector to inspect the property. The due diligence phase is a necessary step to ensure that you are making an informed decision in declaring the property a good deal.