Whether flipping houses or finding rental properties for long term investment, the most important piece of the investment puzzle is locating properties that meet your requirements. A great buyer list and super negotiation skills are necessary, but they can’t help until you find a property worthy of the effort. The process is a lot like panning for gold.
- Know what you’re looking for.
Identify the perfect property for your chosen investment strategy. If you’re wholesaling, it’s mostly recognizing potential at a deep discount buy opportunity. There must be room for your buyer, usually a fix & flip investor, to make money and still provide a nice profit for you as well.
If you’re wholesaling to rental investors, the home usually needs to be in ready-to-rent condition and available with your commission at a price that will yield the investor’s desired cash flow. That cash flow will be dependent not only upon financial and value issues, but also on location considerations. When you can find a home in good condition in a desirable neighborhood, it may be right if the numbers work.
Like panning for gold, some areas are going to have a much better potential for yielding nuggets, as well as some streams and rivers will be much more likely to work for you with less effort.
- Know how to run the numbers accurately.
Doing your due diligence and understanding how to come to the right value for the property is crucial. Its value to your buyer (or you if you’re going to hold it for rental) depends upon the desired cash flow and ROI, Return On Investment.
Even gold panning works far better with some research into areas and stream bottom composition that yield the best return on the hours spent sloshing around all of that river bottom sand and rocks. From a government publications website: “The lack of outstanding success in spite of the great increase in prospecting during the depression in the 1930's confirms the opinion of those most familiar with the occurrence of gold and the development of gold mining districts that the best chances of success lie in systematic studies of known productive areas rather than in efforts to discover gold in hitherto unproductive areas.” Meaning: look first for properties in areas that have yielded past deals. The buy and sell prices for past deals there help you to evaluate new deals.
- Dig & Pan
Once your plan is in place and you have the skills for evaluation and property selection, it’s all about panning for the gold. Marketing, online searching and networking to get as many properties on your radar as possible is the path to success.
- Online Research – Using real estate websites with IDX, Internet Data Exchange, search utilities, as well as Zillow.com and Realtor.com is a great start. For foreclosures, sites like Realtytrac.com and Homepath.com are great resources.
- Online Marketing – Using a Facebook business page, a Twitter account, Craigslist.com and all of the other social sites is how to get your business out there in front of potential buyers and sellers.
- Networking – Meet and cultivate relationships with real estate professionals, appraisers, local zoning and planning officials and anyone else who could be a business referral resource.
According to government research, the average person panning for gold on a regular basis is a hobbyist. There is very little chance of getting rich while breaking your back in a cold stream. Contrast that with the many real estate investors building wealth using Dean Graziosi’s help on a daily basis, because they have made the effort to learn how to find property opportunities.
"""As always to get two of my best-selling books for free, go to http://www.deansfreebook.com.
Enjoy this wisdom and have a great week!