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Finding a good real estate investment takes a lot of work and a lot of patience. When working with a hard money lender, make sure you have chosen an investment that is going to give you enough return to make it worthwhile. To find those kinds of deals, you are going to have to do your homework first. Waiting for the best deals to come to you by word of mouth or social media isn’t the way to go. You can take a quicker approach to finding the perfect deal by doing the following:
Look for properties that have been vacant for a while.
You can find these almost everywhere and you can always ask around in the community for these kinds of properties. Chances are that an empty property is costing someone in actual money, or potential income. In either case, you may have a motivated seller on your hands who for whatever reason has not put this news out. You could be first in line at the offer table.
Look for houses in need of repair.
The best places to look for these are the neighborhoods with rising home prices. The owners might have been in their homes for a while and accumulated a lot of equity, but can no longer afford to maintain their home.
Another approach is to look for signs of non-owner occupied property, especially those that are not well maintained.
The cost of maintenance may be more than the owner is willing to invest. It also may signify trouble with tenants or a general loss of interest in the property. Neighbors will happily supply you with this kind of information since a lack of repairs to a property near them could bring down their housing values.
It should go without saying that all of these techniques for finding a good real estate investment deal require you to get out into the community where you want to invest and talk to people. Information is power, and you want the power to turn your investment into maximum returns.
Another strategy is to start talking to landlords.
Inevitably you will run into landlords who will go on and on about how much of a headache their property is. Be careful with this one. Their complaining may be warranted. But, many times, that landlord is undercapitalized and needs out from under their investment. Again you have found a motivated seller.
The last strategy is quite common, but can still yield great results when looking for a good real estate investment. You can investigate foreclosures.
Just make sure that the property you are looking at is in a decent area and that you are well aware of the potential renovation costs. Foreclosures come up on the market every day so there is always a chance of finding a good deal if you keep your eyes open.
Hire a Determined Real Estate Agent
Of course, you can take an easy route and hire a real estate agent who specializes in working with real estate investors. Let him or her be your eyes and your ears. Prior to signing a contract, explain what you are looking for and be specific of your price range. You can also provide a proof of funds letter to show that you are pre-qualified for a loan, and will not be wasting your agent’s time. You can read more about our hard money proof of fund letters here.
Once you identified that potential deal, do not hesitate to give us a call. As the top local hard money lender, we know the area very well and would be glad to help you crunch the numbers even further.
We also have plenty of tools to help you evaluate each potential investment property. Our Maximum Purchase Price calculator lets you estimate the maximum purchase price you should offer to make the profit you want. Our Hard Money Calculator helps you evaluate each deal for ROI, Return-on-Cash, and the closing costs involved. Go ahead and give these tools a try. There are helpful videos that help guide you step-by-step. If you are stuck or have questions, please give us a call at 240-436-2340.
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