| No matter what business model you adopt, you must acquire profitable deals for successful real estate investing.
Here are a few tips to guide you on how to identify profitable deals for your real estate investing business.
1) Market Value
You must have a property market value before you can buy it. When buying houses, I try to work with low market value to be safe.
The value shown by the county records is a good estimate in most cases. In most cases, it is lower than reasonable comparable sales in the area. However in a depressed real estate market, the market value can be affected by foreclosures. If you do not have access to your local MLS, it would be advisable to team up with a local realtor who can run comps for you from time to time.
2) Repair Estimates
Repair is an integral part of buying and selling houses. You must have a fair estimate of the repairs needed without getting down to the nail and bolt. As you get more experienced, you can reliably estimate repairs by looking at a house in 5 to 10 minutes.
I try to work with higher repair estimates to stay safe.
3) Mortgage Balance
You cannot make an offer on the property unless you know the mortgage balance. If the offer you make cannot pay off all the outstanding liens on the property and leave a room for profit, then it is probably not the best deal for you.
If a seller is not motivated enough to provide this information, you better look for another deal.
4) Sale Price
If a seller wants full market value for their house, they are not motivated enough for you. Unless they can leave room for profit for you, then you would better off moving on to the next one.
Sometimes, you might need to show motivated sellers your numbers so they understand how you arrive at your offer and leave room for profit.
5) Is It Vacant?
This is just an indicator of how motivated the motivated seller is. If they are making more than one mortgage payment, they will certainly want to sell fast. It also indicates that you can own the property as soon as buy it.
How do you collect this information?
It is necessary to have a good real estate investor website to receive this information. The website should teach them how you buy houses, and provide them with the opportunity to submit their house information through your website.
The form should ask for as little information as possible but just enough to know whether you have a deal or not.
The less information you collect the more response you will get through your website. This will save you lots of time because you will not talk to sellers whose houses you cannot buy.
You can then collect more information once you talk to them.
Simon Macharia is a real estate investor in Dallas, Texas. His business is run from a real estate investor website that pre-educates motivated sellers delivering pre-screened and pre-negotiated deals. Visit http://www.realestateinvestorswebsites.net to see how to pre-screen motivated sellers hands-off. |
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