I’ve been in the real estate investing business for a long time, now, longer than I ever imagined. And, certainly longer than anyone—my parents, my siblings, my partner—expected me to be. But, we can be a little fatalistic around here because, in the part of the country I’m from, prosperity comes and goes; it doesn’t seem to last. We’re one of the areas that things come from, not one that they go to, so when the economy doesn’t want what we’ve been selling for the last decade, it’s bust until we find something new. That means just about the only thing certain about the housing market around here is uncertainty.
But, I keep on, and you can, too. Whether you’re in my area or anywhere in the country that’s subject to the ups and downs of national economic trends—which is everywhere—with planning, diligence, and the right strategies in place, you can find fixer-upper homes to buy, rehab, and sell.
Learning to Where to Look for Fixer-upper Homes in Your Market
So, how do you know if the area you want to invest in is located in an uncertain market? I’ll tell you a secret: every market is uncertain. Over time, markets will go up, and they will go down, and nobody will see it coming all of the time. To be able to analyze all relevant trends and their combinations then synthesize these into flawless predictions takes laughably more time than you or any brainiac algorithm will ever have.
What I’m saying is, you don’t need some “method” or some “system,” as even the best of these are incomplete and flawed. What you do need is prudence and humility. I know that’s not a popular opinion, especially among those who’d like to sell you one, but, well, I’ve watched these fads awhile: they come, then they go. I’m still here.
That said, bear in mind that there is no value to a dollar, or a property, beyond consensus and opinion. So, paying attention to the consensus and opinions of those in your area will help you know which way the wind is blowing at the moment. This is the shop talk, bandied around at diners, dinner tables, parking lots, and on the sidelines of kid’s soccer games. Often, it is discussed in percentages and prospects, but all these busy numbers boil down to just a couple, basic questions:
Do people want to move to your area?
If so, then the property you have will likely sell or rent for more than what it did before. The property you want to buy will cost more, sure, but will increase in value so long as buyers see opportunity in living there. Understanding why these people want to move allows you to guess for how long they will continue to arrive. This question can be answered in as many different ways as you define your area, from a geographical region to a single city block.
Do people want to move away from your area?
If so, then the property you have will sell or rent for less. But, properties you want can be bought for less as well. Learn why people are moving to estimate how long it may be before they or others come back. This scenario might be your opportunity to buy distressed houses and rent them out while the market adjusts again.
What are houses going for these days?
Know this, and you’ll know how much the properties you hold, and those you want to buy, may be worth to others. The closer you’re able to estimate consensus value, the more ably you’ll predict the return each investment will yield. Of course, instead of listening to your neighbors, friends, or local real estate agent, you can get the numbers on a potential investment house for yourself with a real estate investment valuation tool.
Knowing the answers to these questions helps you understand whether it’s a good idea to purchase local properties and what to expect from them if you do. But, in order for any of this to take place, you must be in a position to be able to buy properties first. To do so, you need leads.
The Nuts and Bolts of How to Find Fixer-upper Homes
There are many tools and tricks to try to find leads on distressed houses for sale—regardless of what your local market is doing. If I haven’t tried them all, it’s not for lack of trying. Some of them even work, sometimes. No one wrench turns every nut, so it’s a good idea to keep all of your tools in the shed. Here’s a few:
- Lead Lists. Buy enough lead lists, and you might find a gem of an opportunity. These lists will have as many potentially distressed properties in your area as the publisher can find—which won’t be all of them, but will be some at least. Try scanning through to find likely prospects in your price range, then doing due diligence to make sure they match the description. Don’t take too long, though—other investors are looking at these lead lists, too.
- Driving for Dollars. More like driving for days. Which, if you consider the opportunity cost, amounts to much the same thing. It’s worth taking a cruise now and again, though, to see if you find any properties newly for sale, or which appear like they might be soon. Then, you can follow up by finding the owner and seeing about a meeting of the money. My advice? Rather than burning diesel day after day, just take the long way home when you get the chance—you never know what you’ll run into.
- Foreclosure Auctions. County or city auctions usually have distressed homes. Check out the listings beforehand, so you have an idea of a property’s situation before you step in it. If nothing seems interesting, don’t show up. If something does, show up with your wallet—and be ready to cut yourself off. If you don’t let go in time, a bidding frenzy might just carry you away.
- Online Listings. You can find anything you want online, including low-priced properties for sale in your area on Craigslist or Zillow. Mostly, that’s because you can also post anything you want online. Some of the properties are really for sale; some of them aren’t. Some of them aren’t really even properties. That’s not to say you can’t find a deal, but you’re likely to do a lot of scrolling and refreshing before you do. First thought: caveat emptor. Second: limit it to when you’re already gonna be sitting around for a while minutes anyway.
Really, any and all of these strategies might result in you finding a good deal on a fixer-upper property. None of them are going to be the only place you need to go to make a living in real estate investing, especially in an area with limited stock or a low population. So, I recommend all of the above—plus what I’m getting to below.
Getting Leads in Uncertain Markets as a HomeVestorsⓇ Franchisee
While there are many ways to find fixer-up houses for sale, there are also ways for properties to find you: advertising strategies including direct mail, email, radio, billboards, etc. These inbound lead-generating methods work best when you’ve positioned yourself as a leading buyer in your area. This way, when people in your area are ready to sell, you’re the first person they think of.
Advertising is expensive, however, and unless you have a very large budget and a long time to build credibility, it’s difficult for this strategy to pay off. However, if you join forces with a company that has already laid the groundwork—like I did when I became an independently owned and operated HomeVestors® franchisee—you can realize benefits more quickly.
HomeVestors, a nationally-known and trusted brand, advertises across the country, including in my area. When someone wants to sell their property, regardless of the state of the market, I’m often the first person they call. The name recognition is that powerful. By relying on this pipeline, carefully choosing the properties I select from it, and knowing which way the trends in my area are moving, I’ve been able to enjoy a professional real estate investing career through good times and bad.
Do you want to be able to find solid real estate investments on fixer-upper homes, even in troubled markets? Contact HomeVestors today!
Each franchise office is independently owned and operated.