Dec 15

Great real estate deals are a dime a dozen, if you know where to look.  The art of bargain hunting is a process that takes time, in most cases, years to master.  Knowing where to look for bargains is the difference between pros like Dean Graziosi and amateur investors. 

Let’s make the assumption that you are not looking to purchase real estate at auction, but rather from individuals.  The process starts with finding motivated sellers.  Now by motivated sellers, I am talking about sellers that have an urgent need and must sell their property below market value.  All sellers are motivated, not all sellers have an urgent need to sell their home.  Just some of the reasons home owners are forced to sell below market value include divorce, job relocation, foreclosure and other financial hardships, a death in the family etc.  In fact, some owners even sell their properties at a loss just because they no longer want to be landlords!  Well, I’m glad to say, their loss is your gain. 

Once you have located a motivated seller, your job is far from over.  At this point in the game, you should do what successful real estate investors call “farming.”  In fact, sometimes it’s better to do your “farming” work before you find the sellers.  In other words, pick a real estate community and focus your marketing efforts in that area.  It is best to pick an area that is convenient for you to travel to, as your job requires driving around the neighborhood, attending open houses and researching location specific information. 

Enough cannot be said about attending open houses.  In order to really understand the value of homes in any particular area, you have to get inside a lot of them.  By going to numerous open houses (particularly FSBO homes), you will be able to determine the rough value of a home in that area with a simple description.

Another thing you must spend time doing to hunt down true bargain properties is to spend time driving around looking for ugly, semi-run down, vacant homes.  Now, I am not talking about condemned homes, I am talking about fixer uppers in the true sense of the word.  Look for obvious signs of a vacant home; these signs include overgrown grass, trash, boarded up windows and doors etc.  If you are unsure if a home is vacant, ask a neighbor or the mailman.  Once you have determined a property is vacant you can do the necessary research to find its owner.  This may include contacting neighbors and the county assessor’s office.  In many cases this is where you can determine whether or not an investor is a pro, as most amateurs give up at this state of the game.  Locating and talking with an owner of a vacant or abandoned home is not an easy task, but if you will put in the effort the results can be tremendous.   

 

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