Real estate investors know that the best real estate investments are the ones that bring back the highest return. When buying investment properties, there is always some sort of an exit plan. The plan can be to sell within a year or wait 50 years before selling. The truth of the matter is that the best real estate investment strategy is the one that works best for you. In an ideal world, making money in real estate is easy. You find homes below market value and sell them at a large profit. However, this is not always the case. Finding homes below market value is not an easy task but can be much easier with these hacks.
Let us begin by first determining what fair market value is. Well, fair market value is the price that any house can get under the given current conditions. However, this is dicey because the value is truly determined by how the market is doing. In a buyer’s market, your return is going to be lower than that in a seller’s market. Since there is no fixed priced, an opportunistic real estate investor is able to buy cheap investment properties and get a higher return.
Finding homes below market value is trickier than just buying an investment property. It requires the investor to be diligent, goal oriented, and patient. These are properties that are found through networking and asking the right person the right questions. You may also find them with the right online platform that will give you access to the right data and tools, like an Airbnb calculator or property finder. Below are 6 hacks that can be used to find homes below market value.
Related: How Do You Find Real Estate Comps?
Top 7 Ways How to Find Below Market Value Homes for Sale
1. Marketing
Real estate investors who are serious about finding homes below market value go out of their way to find home owners who can be persuaded into selling. There are situations when a real estate property owner is thinking to sell his/her home but hasn’t pulled the trigger on the deal. This is where ads can be beneficial. By putting yourself out there through online ads, in the newspaper, in mail slots, and through postage mail, your name will start spreading. These ads are simple and straight to the point: “Buying homes for cash”.
The homeowners who are interested will call. They will require a clear and concise plan to know that they are not wasting their time. Be sure to have a good plan with an idea about the potential of the property.
2. Knowing Real Estate Attorneys
Real estate attorneys have the inside scoop on people who need to get paid quickly. They have houses that they need to sell ASAP. This is where a good real estate investor can pounce on a great deal and buy homes below market value. Real estate attorneys are always in the loop of properties that are for sale or going to hit the market. The more real estate attorneys you know, the more in the loop you can be, and the higher chance you can find homes below market value.
3. Public Records
Local news as well as local and state government websites are great for finding real estate properties that are being foreclosed. Most foreclosure cases are disclosed under public record. This is where an opportunistic real estate investor thrives. He/she goes straight to the source for finding homes below market value.
Related: The Pros and Cons of Buying a Foreclosure
4. Real Estate Auctions
Each one of these hacks requires a real estate analysis report to be conducted. Buying real estate property requires the investor to have knowledge about more than just the property alone. It requires that the real estate investor gets to know the neighborhood, the amenities that surround the place, and the potential the area possesses. This is extremely important information for any real estate buyer although it is of a greater value for an investor purchasing property through an auction. Real estate auction sales require quick thinking. You are required to assess the value of the property on the spot, and you have no time to think. In order to not get overzealous during the bidding, it is important to have your research complete before the day of the auction. Knowing the value of the real estate properties before entering the auction will help you find homes below market value.
In order to invest in properties through real estate auctions, the investor needs to keep up to date with the listings and the properties that are being auctioned. Properties that are being auctioned off can be found through traditional courthouse auctions and through auction websites. Stay up to date. Do your research and be opportunistic to successfully find homes below market value.
5. Real Estate Wholesalers
It is not what you know, it is whom you know. This is the best advice anyone can give towards anything in this life, and buying homes below market value is no different. Get to know your real estate wholesaler. Wholesalers are looking to sell their properties, so it will not hurt to be the first to know about these cheap investment properties. House wholesaling is when a real estate wholesaler tries to sell a fixer-upper quickly. These real estate investments can be a fix-and-flip property, or they can be the starter that you have been looking for. Get to know your wholesaler, as he/she is selling homes below market value. Know what your real estate strategy is before purchasing a property. This is a big investment, so understand what you are getting yourself into.
Related: Renting Your Property Below Market Value
6. Tradesman
Real estate projects are started everyday, but not all real estate projects are completed. For whatever reason, there are projects that do not get completed. Whom better to know about these projects than the people working them? A tradesman affords you the opportunity to find a project that you will be able to complete. This is a good way of finding homes below market value.
One person’s misfortune is another person’s opportunity. When buying homes below market value, a real estate investor needs to be opportunistic. Find an opening for a potential opportunity and pursue it. The best way to find these opportunities is to keep your ears open for any potential investment property trying to be moved quickly. The best way to do so is through networking. Get to know people from all avenues, from tradesmen to real estate attorneys. You never know who is selling homes below market value.
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