If you really want the best deals in multifamily properties, you have to increase your odds by digging deep and finding more deals. Who is more likely to get a cheap apartment building deal, an investor that looks through loopnet.com and calls it a day or the person who has a multi-pronged marketing approach that can generate leads ten different ways?
Real Estate Brokers
A real estate broker or real estate salesperson (often called a real estate agent) is a person who acts as an intermediary between sellers and buyers of real estate/real property.
Their mission is to complete documentation for a real estate transaction between the buyer and seller.
Real estate investments require capital. Depending on the property and your creditworthiness, you might be able to get bank financing; otherwise, seek private investors. Not only does finding the right investor secure financing, but you can also gain a valuable team member with experience to deal with the many problems that can happen when investing in properties.
Many states only require a publicly accessible space, like a hotel ballroom or room in a convention center. In some of these larger venues, hundreds of foreclosure properties might be auctioned on a single day. The basic steps for participating in a live foreclosure auction are the following:
- Find and track foreclosure auctions
- Do your research
- Drive by the property, if possible
- Get your financing in order
- Confirm all auction details, even on the day of the auction
- Attend the auction and bid
- Find a property you love
- Do your due diligence
- Register for the auction
- Prepare your financing
Association and Real Estate
In most cases, members of investment clubs pool their money and make investment decisions together. Sometimes, the clubs themselves have stated investment objectives, such as value investing or investing for income. In the case of real estate investment groups, members are focused solely on investing in real estate. These real estate investment clubs are helpful and beneficial in some many ways. Real Estate Investment Clubs are groups that meet locally and allow investors and other professionals to network and learn.
They can provide extremely useful information for both the novice and expert real estate investor. A top real estate club can provide a great forum to network, learn about reputable contractors, brokers, realtors, lawyers, accountants, and other professionals. On the other hand, there are many real estate clubs designed to sell you. They bring in “gurus” who sell either on stage or at the back of the room, and as a result, the clubs typically profit to the tune of 50% of the sale price of the product, bootcamp, or training that is pitched.
Local and National Online Sites
Whether you are a seasoned investor or just starting out, knowing where to find investment property is one of the biggest challenges facing real estate investors. Online websites are a great place to search for property. They allow you to view properties from all over the country from the convenience of your computer. Here are seven websites that could prove very helpful in conducting your search.
You may be fond of investing, but finding an income property with potential may not be something you look forward to
Some investors find less-than-ideal properties, just so they can avoid the hassle of trying to find a motivated seller. Unfortunately, this means that not only do they miss out on some great deals, but they also limit themselves to the same list of properties available to every other investor out there.
Instead of snapping up distressed properties with plenty of room for adding value, these investors end up paying far too much money for run-of-the-mill properties that do nothing for their portfolios – or their pocketbooks.
Every seller – regardless of what they’re selling – has a specific motivation for selling a particular item at a particular price. Uncovering the underlying reason for selling the property should come even before you do any due diligence on the property.
In commercial real estate, the term “motivated seller” means that the seller is not only interested in selling the property, but that they need to sell their investment quickly. They don’t have the time, patience or money to wait for a buyer that fits their exact requirements, and in exchange for a quick sale, they are willing to accept less on the property.
There are two ways motivated sellers tend to be flexible:
One is on price – i.e they are willing to accept a drastically lower price – sometimes as much as 10% – 30% of market value – in exchange for a quick sale.
Motivated sellers can also be more flexible in the terms they offer you. For example, they might be willing to finance the property for you, accept no money down, or forego interest.
Both are pretty attractive for serious investors.
Many commercial real estate investors prefer to invest in properties out of state in addition to those in their home state. While this often gives investors a wider selection of prime properties to choose from, it also means these owners will be less involved and less aware of the factors that may affect the value of the income property.
There are also owners who did live in the area but had to move out of state, leaving them disconnected from the day-to-day affairs of the property, the neighborhood in which it is located, and the market.
Keep in mind that not every property will turn out to be “the one.” You might have to do a significant amount of digging before you find the deal that is right for you. Remember, you don’t want to settle for a so-so deal; ten or fifteen great deals will outperform a hundred okay ones. It’s a numbers game but it’s one you can win.
As informed investors we should understand the risks associated with real estate investing and that there is no guarantee. Please do your due diligence.
What are the ways to locate properties?
- Real Estate Brokers
- Association and Real Estate Investment Clubs
- Local and National Online Sites
- Motivated Owners