During these difficult times for many, there are many opportunities out there available to those looking to invest! Real Estate investing at times is on fire and always a good choice if you know what you’re looking for! There’s some great seminars out there for those looking to be educated on Real Estate investing as well.
The reality of Real Estate investing, which will get told to you by also those who are considered by many to be Real Estate Guru’s that it may sound easy, and truth of the matter is that it’s simple, but not easy… Out of the thousands which attend seminars on Real Estate investing, the statistics show that only about 5% buy 1 investment property.
If you’re looking for a quick and short plan to assist you or anyone you know to start building some financial independence, you’re on the right page.
Those looking to invest in Single Family Residences should follow these 4 steps:
1. Buy homes below full market value. Yes, people really do sell homes for less than the home’s full value. The key is to understand that most home owners will only consider a purchase offer that is all cash and within 5% to 10% of their asking price.
The successful investor learns to find financially distressed home owners who have no choice but to sell for less than market value. In recent times with unemployment hitting an all time high here in Santa Monica and the surrounding areas, there are many Short Sales and Foreclosures out there. Too many individuals have lost their job or been suddenly transferred; some are divorcing; some have been living beyond their income; the family has been overwhelmed with medical bills and, not uncommonly these days, their money has gone to support a drug habit.
Those are examples of motivated sellers. They have to sell and they will accept something other than a conventional, all cash offer.
2. How do you find motivated sellers? You work at it! Like any business it is important to develop a little marketing plan. One that is simple, yet very effective, is the one that was proven 75 years ago by the Fuller Brush company; door to door sales.
You are selling your skill as a home buyer to people who must sell. Your are there when they need you and you have the skill to help them solve at least part of their problem. With door to door prospecting you will learn more and buy more homes quicker than any other method. However, most people just won’t walk door to door for three or four hours per week. OK, there are other ways.
You can watch public notices for the announcement of foreclosure sales. Meeting with a home owner right after they’ve received a notice that they are about to lose their home allows you to deal with a very motivated seller. Other public notices that provide buying opportunities include probate, divorce and bankruptcy. You can follow the Homes For Sale listings in your local newspaper or Internet site.
You can telephone the names found in these notices or, and this is the least time consuming, send a postcard expressing your interest in buying their property. It will produce buying opportunities, just not as many as personal contact.
3. After you’ve found a motivated seller you must understand how to frame offers that provide benefits for both you and for the home owner. A good real estate investor quickly learns that this is not a business of stealing property, but of solving problems in a way that benefits the seller.
The home owner is in a tight spot of some kind and you can save them from public embarrassment and, in most cases, give them at least a little cash to get a new start.
No investor can afford to leave cash in every deal. No one but Bill Gates has that much available money. You must use creative techniques like, leases, option and taking over mortgage payments. Little or no cash is needed for those deals. You can find plenty of reasonable priced educational material on those subjects in book stores or on EBay. The same education that seminars sell for thousands of dollars.
4. You make your profit when you buy! Never make a purchase until you’ve carefully determined exactly how you will get to your profit. If you hold it as a long term investment will the monthly rental income more than cover the monthly mortgage payment? Will you sell the deal to another investor for fast cash? Will you do some fix-up and sell the property for full value? Will you quickly trade it for a more desirable property? Have a plan before you buy.
There you have four steps that even a part-time investor can execute in three to four hours per week. What’s the missing ingredient? Your determination and perseverance. If you will unfailingly follow the plan for a few months you will be well on your way to financial independence.
The information contained in this article is provided to you “AS IS”, does not constitute legal advice, is governed by our Terms and Conditions Of Use. We make no claims, promises or guarantees about the accuracy, completeness, or adequacy of the information contained in or linked to this article. Any information should be independently verified for accuracy. Please consult with a Real Estate Professional if you have any questions about this article.