Successful real estate investors recognize that the key to success in real estate investing is knowing how to find investment properties for sale.
Table of Contents
- What Is Real Estate Investing?
- Investment Properties vs. Homes for Living
- 5 Easy Methods on How to Find Real Estate Investments for Sale
- Wrapping It Up
More than being a numbers game, real estate investing is really a strategy game. You need to have the right game plan that will help you achieve your investment goals. It’s not just about buying any investment property for sale near you. Availability is not as much a concern as profitability.
Before making any decisions, you need to sort out a few things. You should take a look at the market conditions of the locations you’re considering. Is it viable and profitable? Does it line up with your investment goals? Is it within your budget? These, and several other factors, need to be taken into consideration before you go looking for properties for sale.
The first thing you do when you start real estate investing is to search for investment properties. Therefore, we are here to answer the question, “How to find investment properties for sale?” Let’s talk about it some more below.
Related: Mashvisor’s Investment Property Calculator: Real Estate Investing Made Easier
What Is Real Estate Investing?
Real estate investing is simply generating money through real estate investments. It can be land, land development, or even properties for sale.
The thing that makes real estate the ultimate money-making business is the variety of investment strategies available to those interested. There are so many real estate investment strategies that are very lucrative. Beginner real estate investors will not have a problem getting into this kind of business.
They can choose to invest in rental properties, which is the easiest investment strategy for them. Later on, once they gain the required experience, they get to upgrade their investment levels. Investment strategies like fix-and-flips, micro-flipping, and other alternative investments are also great. However, they require a different level of experience and skill set.
Moreover, the real estate investing business is excellent for the diversification of your portfolio. You can invest in multiple properties for sale using different investment strategies to split the risks. This means that you get to invest however you want with the lowest risk rates.
It really only takes the first investment deal to set your feet in the business. After you’ve done that, the ball will keep rolling.
You should keep in mind that it takes more than just buying an investment property for sale to be successful. You should also take into consideration the calculations involved. The next section will show what we mean by that.
Investment Properties vs. Homes for Living
Any human being can buy a real estate property. However, not all real estate properties for sale are for investment purposes. When you buy real estate for sale as an investor, your goal is to keep making money out of it regardless of the strategy.
Meanwhile, when a person buys a home to live in, it’s a different matter altogether. This is where the calculations come in place.
The calculations we are talking about are the different property valuation methods. Knowing what they are will help you know how to find the right properties for sale according to your goals.
Such methods include investment property analysis and real estate market analysis. They are used in real estate investments in order to determine the profitability of the property, as well as the area in which it is located. Such concerns are not as important when you buy a home to live in.
Analyzing Investment Properties
Knowing how to find investment properties for sale requires some heavy market data analysis. You simply can’t say you know how to find good real estate for sale by just spotting “for sale” signs as you drive around town. It doesn’t work that way.
Even if you choose to do it the conventional way, driving around town looking for properties for sale is no longer cost-effective, especially considering the digital age we’re in. It may be a good way to find properties decades ago, but there are easier ways to go about it.
Nowadays, a lot of investors utilize technology to find properties for sale worth investing in. In their quest to find the most profitable homes for sale, they turn to the internet.
Going online has helped them connect with the right people and find the right properties for sale to invest in. Logging onto real estate platforms and using mobile apps has also been instrumental in helping investors in their search for the right investment opportunities.
How to Know if a Property Is Worth Investing in
As much as real estate investing is rewarding, it also entails certain risks. Even the slightest mistake will take a huge toll on your investment and financial success. This is why, beyond knowing how to find properties for sale, you need to know what features to look for.
Here are the most important factors you need to know before investing in a house for sale:
Location
Any real estate professional and investor will tell you that location is paramount to any real estate investment. The right investment opportunities require knowing how to find the right location before you go looking for houses for sale.
There are several factors to consider when looking for the right location. You need to look at the short and long-term development plans for the area. For instance, that empty piece of land for sale in a quiet neighborhood might turn out to be a huge manufacturing plant in a few years.
The changes that take place over time will affect the valuation of the neighborhood it is in. As an investor, you need to take into account what the future has in store for a certain location before buying any real estate.
You also need to factor in the local economy. What is the job market like? Does the place have a growing economy? How is the local tourism industry doing? Knowing the economic status of the place will help you determine whether it’s a desirable location to invest in or not.
Knowing how to identify a location based on the above and other important factors will spell the difference between success and failure.
Valuation
Next is property valuation. More than just knowing how to find a good location, you also need to know how much a property is worth. If you want to find the right property for sale that is right up your alley, you need to figure out how to compute the valuation.
By definition, property valuation is the assessment of a subject property’s value based on several factors. The factors include location, condition, and other similar important ones that give you an idea of how much the property is worth. Estimating the value of real estate property is important, especially when it comes to financing.
Real estate valuation is important if you want to know how to find what a property’s current market value is. The most common valuation methods are:
- Sales Comparison Approach. This is done using real estate comps.
- Cost Approach. This factors in all the costs involved minus depreciation.
- Income Approach. This is based on the income-generating potential, which is suitable for rental properties.
Investment Goals
Before you set out looking for properties for sale to buy, you need to sit down and set some goals. Given how expensive houses for sale are and how illiquid they are, a lack of clarity on your goals might derail you. It can lead to unexpected – and unwanted – results.
For this reason, you need to list down a clear set of goals that are specific, measurable, achievable, realistic, and time-based. You need to find the right reasons before you make any solid investment decisions. Even if you find a beautiful house for sale that’s promisingly profitable, if you don’t have a clear set of goals, you might end up going in a different direction than intended.
This is why knowing how to come up with clear and smart goals is essential before going on your investment journey.
Expected Cash Flow
While goals are important when it comes to how to find the best income properties for sale, all investors share the same goal. That is to make as much money on the deal as possible. You’re not just after how much money is left after expenses. You want the property to generate steady income for you.
To get an idea of the income-generating potential of a property for sale, you need to know the following:
- Expected rental income
- Appreciation
- Depreciation and tax benefits
- Renovation costs
- Mortgage rates
The above metrics will help you get a better projection of your return on investment and how much profit it will make you.
Financial Situation
Lastly, you need to ask yourself the hard questions. One of them is, “where do I stand financially?” The idea of investing in and earning from real estate can be quite romantic. A lot of investors consider it a dream come true. However, if you go into it when you’re in a bad financial situation, it can become a nightmare.
Before you go out to find the right properties for sale, you need to ask yourself first if you can afford to push through with the investment.
Do you have an emergency fund in place? Do you have enough savings on top of your emergency fund? Do you have a stable source of income to support you while you’re still waiting for your ROI? Can you afford the current mortgage rates today? If mortgage rates increase, can you still make regular payments?
These are just some of the questions you need to ask yourself when it comes to your financial situation. While real estate investing is a great way to expand and diversify your portfolio, you need to make sure that your other priorities will not be compromised when you go all-in.
How to Find Real Estate Investments for Sale: 5 Easy Methods
When it comes to finding investment properties for sale, you can go about it in several ways. Here are five of them:
1. Ask People You Know
The first and most common way to find investment properties for sale is to ask people. We are pretty sure that you can find some options through the people you know.
Check your acquaintances to see if anyone deals with properties. They might have something to offer you, or they might know if there are suitable properties for sale that meet your needs.
2. Hire a Real Estate Agent
Professionals are always there to help you with your business. A real estate agent is an expert who knows where to look for a property for sale. Moreover, real estate agents are able to access certain real estate resources, unlike ordinary investors.
Another way a real estate agent can benefit you is through connections. As you already know, the real estate investing business is a people’s business. Therefore, you cannot go far without connections.
A successful real estate agent has worked with many investors and other agents before. So, they are supposed to be able to help you find investment properties for sale.
However, keep in mind that you need to find a real estate agent who is an expert on investment properties. There are agents who have only worked with regular homes, and that is a whole different story. It takes special professionals to deal with investment properties.
Investment deals involve real estate investment property analysis. Based on it, you will be able to determine the return on an investment property and choose a profitable one.
Check out Mashvisor for a list of licensed real estate agents. If not, then go to Realtor.com, which is the official website of the National Association of Realtors. You can check their list of realtors and choose based on their portfolios.
Related: Do You Need to Find a Real Estate Agent to Buy Investment Rental Properties?
3. Check Real Estate Websites
There are plenty of real estate websites with listings of investment properties for sale. They also offer a detailed analysis of each property as well as its location. Here is our list of recommended real estate websites for listing properties:
Mashvisor
When you are looking for real estate for sale, Mashvisor is an excellent source as you can find all kinds of listed income properties. Moreover, the platform allows you to perform investment property analysis and neighborhood analysis.
You can check the cap rate as well as the cash on cash return for a certain investment property. All you need to do is insert your data.
To learn more about how Mashvisor can help you find profitable investment properties, schedule a demo now.
Mashvisor is the best platform for investors in search for investment properties for sale because of the analytics it provides, among other features.
Apartments.com
If you are a rental properties investor, then Apartments.com is for you. The site provides real estate investors with the platform to connect with tenants, making it one of the best ways to market your property, as well as to get good tenants.
LoopNet
LoopNet is the best when it comes to real estate for sale, but it is dedicated to commercial real estate investing. You can find listings of properties that are for lease, as well as industrial investment properties. Of course, they are among many other commercial property types.
Trulia
Trulia is a source for some of the best real estate investments. You should also install their user-friendly app, which will make it easier to access the site whenever you need to. Also, with Trulia, you will be able to conduct an accurate search of investment properties for sale based on the criteria you set.
Roofstock
On top of being a reputable website for homes for sale, Roofstock is also the only online marketplace that allows you to purchase turnkey investment properties for sale. It is also the only place you can buy multifamily rental properties with existing tenants.
FSBO.com
FSBO.com is a site that specializes in connecting investors to really motivated home sellers. The website stands for “for sale by owner,” a concept in real estate investing where the homeowner takes care of the entire selling process without any assistance from any real estate professional.
Realtor.com
Another great website to look for homes for sale is Realtor.com. The main thing that sets the website apart from all the others on this list is all listings are represented by agents who belong to the National Association of Realtors (NAR). It is a good go-to site if you’re looking for a comprehensive list of both homes for sale and for rent.
Zillow
Zillow is one of the leading online marketplaces for properties for sale and for rent. It offers several useful tools that can help you find potentially profitable homes for sale in your area. Founded in 2014, it is trusted by countless investors and homebuyers.
Related: Real Estate Investment Resources: The Online Revolution
4. Look for Print Media
Printed media is another great way to find investment properties for sale. Check out newspapers, magazines, and brochures at a local store, and you will find real estate ads for investment properties for sale.
5. Ask Other Real Estate Investors
As we already mentioned earlier, the real estate industry is all about having the right connections. Getting plugged into the right network will help you reach your goal of buying a house for sale and making money off it.
Hanging around other real estate investors is important when you are looking for investment properties for sale. That is the very reason we suggest that real estate networking is important.
Most real estate investors are experienced in buying investment properties. Moreover, they might want to sell their own. So, make sure you join their clubs and forums and stay in touch with them as often as possible.
Wrapping It Up
To wrap things up, knowing how to find investment properties for sale will greatly help you move forward in real estate investing. If anything, it is one of the most important skills you will need to acquire as a real estate investor.
While going about it the old-fashioned way is good and still somewhat effective, using technology will significantly speed up the process. You will find that using a real estate platform like Mashvisor will save you lots of time and money compared to the traditional way.
Mashvisor helps you find the best investment property that lines up with your goals through its property search feature. Also, it includes an investment property calculator that will do the calculations for you. The calculator uses up-to-date data and information and factors them into your data analysis. It allows you to get only the most accurate results.
Finally, you can use Mashvisor as a guide on real estate investing for beginners. Learn how to become a real estate investor and find the best income properties to begin your real estate investing business.
Click here to sign up for a 7-day free trial of Mashvisor today, followed by 15% off for life.