Finding Great Real Estate Investment Properties
With more and more people interested in entering the real estate investing arena, the number one question is, "Where do you find a good property worth investing in?" A great question indeed and one we get all the time which will create a great opportunity for a great post. The question reminds me of a college level course I took called, The Referral Institute. The course taught an interesting element that very much pertains to this question. In a nutshell, it outlines that in order to expect a great reply to any question requires a specific question.
Questions which are asked in a more specific nature will prompt someone to really search the human Rolodex (their mind) looking for a solution based answer . The general question, “How can I find investment real estate properties” is so broad that it usually gets an answer like, I don’t know.
O.K. enough with the deep philosophical stuff
Let's break the question down to uncover some specific questions and we can answer each of them. One of these more specific questions may pertain to your question and the answers will provide for specifics as well,
Where can you find good cash flow investment properties?
Or to be more specific, where do you find turnkey properties that are already cash flowing? Buyers groups tend to be the best resource for properties which are already cash flowing . They indeed offer you the most sustainable investment since the guessing work has been removed as you are now buying a performing asset.
These performing cash flow properties are typically non-listed properties and cannot be found through your conventional advertising outlets or through a typical real estate agent.
These performing asset properties are typically offered through exclusive buyers groups such as Equity Builders Group. The reason for this is sellers prefer to sell to educated investors. Often investors are new to the field of investing and tend to do a lot of tire kicking (ask a lot of questions and shop the markets) which takes a lot of the seller's time.
It is for this reason they prefer to offer property exclusively through buyers groups as they know they are now dealing with more educated investors since the buyers group provides all this up front knowledge to the prospective buyer. This allows the sellers to do what they do best, find distressed property, rehab them, and place tenants in them, Sell them as a performing asset and then repeat.
Manufactured cash flow properties can be found though a couple of channels
Cash flow property can be manufactured, meaning you buy a property, place a tenant in it and turn it into a cash flowing property. With these properties you have a couple of different outlets.
Driving around and finding for sale signs is one, but this can be slow and hit or miss. Your Realtor (local real estate agents) is another. While the opportunities are limited a local realtor may be able to help you find a property that you can buy, place a tenant and create cash flow.
I have personally done this myself and also helped investors as a realtor to do so. The challenge with this is that the MLS (multiple listing system) that is used by the realtor professionals are designed for the retail buyer and seller. This makes it much harder to find any properties with a price point that is conducive to buying and renting for a profit suitable for an investment. It is imperative to buy property that can provide a good cash flow and while working with a realtor is the first attempt by many, it becomes frustrating very quickly as the deals are few and far between because you are shopping in a retail store.
Buying a property from a wholesaler is for the active investors who want to purchase property at a good price and have the time to devote toward the art of the deal. Wholesalers are people whose business is finding highly motivated sellers as well as motivated buyers.
They create buyers lists of people (often investors) looking for property at a good price. Then they (through extensive post card and direct mail marketing) find highly motivated sellers who have little to no mortgage on their property.
These properties are typically always distressed in one fashion or another, making them a candidate that does not work well for venues like the MLS system as they have many repairs issues to contend with. Often these homes will not be able to be financed through typical lenders.
Then they simply sell you the properties that they find and add a finder’s fee to the cost of the property. These properties are typically tired out and in need of repair. Instead of fixing the properties they are more motivated to simply sell the property cheap and move on.
The person who takes the time to renovate the property can usually create a nice win by buying low, fixing up and increasing the value enough to make a substantial profit. They can then sell or place a tenant and keep for long term investing.
If this type if investing is for you, you will want to get added to as many wholesalers mailing lists as you can get on. If you search wholesalers in your prospective areas you should be able to find them. You can also visit the local REIA (real estate investment association) groups. Simply google the name of your city and then REIA. Example TampaREIA. You will find many wholesalers in these groups.
This tends to be a good ole boys network. They have little time for tire kickers. To be successful you will want to have funds in place and be able to move swiftly. The quickest way to get removed from a list and shut out of a good ole boys network is to try and tie up property and then cancel a deal. This is a fast moving network and requires massive action. A good way to look at this is to know there are many more buyers for cheap wholesale properties than there are cheap properties. Simple supply and demand. You need the properties, the properties don’t need you.
If you are interested in finding great real estate investment properties, make sure to join the Equity Builders Buyers Group today!