After I helped Olivia decide whether she should buy investment property or not, our attention briefly turned to the kids. We were each picking up our little ones from daycare, which is how we met. Kids in tow, she asked: “So, what is the best way to buy investment property?” As a full-time real estate investor, which fits well with my responsibilities as a mom, I’d worked hard to find the answer to that same question. Unfortunately, Olivia is an account executive with a large corporation and has very little time for her family, let alone to find leads. But, since returning to her job from maternity leave, she’s thought about leaving for good. Of course, I encouraged her. Not going to a desk job on a daily basis doesn’t mean you have to do without. In fact, as a professional real estate investor and mom, I’d say that if you have an efficient means for finding property leads, you actually have the potential to have—and give—more. And, that’s what I shared with Olivia.
What is the Best Way to Buy Investment Property?
Olivia’s question about leads is one that is almost always asked by new real estate investors and anyone who’s thinking about becoming one. But, because finding consistent leads on good deals is the cornerstone of running a successful real estate investing business long-term, more experienced investors often ask, too—especially if they work in a competitive market. So, whether you’re thinking about buying your first investment property or need to find a smart way to buy more, you’re in good company.
To help get you into better company, here are some lead-finding strategies that may help you expand your portfolio, grow your business, and provide for your family:
Subscribe to Lead Lists
Lead lists are a go-to strategy for finding distressed properties to invest in—and, it’s not hard to see why. On them, you’ll find everything from homeowners who are behind on their payments to properties that lingered on the market too long and have been taken off. And, because they’re completely customizable, you can expand your range of leads to include things like deaths and divorce filings, too. Whatever you can imagine that might cause financial strain on a family, you can probably find and buy a list for. Then, you can use that information to contact the homeowner with an offer and, maybe, close on a deal.
Personally, however, I find this strategy for investing in single-family homes, or any other property, awkward at best and potentially offensive at worst. Since the information on lead lists is so often out-of-date, you could find that you’re calling about a house that’s already been sold. And, when a family is in turmoil because of a death or divorce, your call won’t likely be welcome if it’s answered at all—regardless of whether the house is still available and up for grabs. Even then, the popularity of these lists only increases your competition and, as a result, your chances of remaining empty-handed.
Attend Foreclosure Auctions
Foreclosure auctions are another common place to find real estate investors looking for great deals. And, since there are plenty of homeowners who fall behind on their tax and loan payments, there tends to be a good deal of houses that get sent to an auction. The advantage of buying a property this way is twofold. First, starting bids are usually low. So, the opportunity to buy a house at a below-market value can seem high. Second, auction homes are typically in some stage of disrepair. Fix it up right while controlling your cost, and you could have yourself a decent investment property that yields an even better ROI.
But, buying foreclosure auction homes come with a lot more risks than they do potential rewards, so you might want to think twice before you get too excited. First of all, investor competition is tough, which makes your chances of winning a bid slim. Second, even if you do win, you may wish you hadn’t. Home inspections are rarely allowed before closing and full payment is frequently due within days of winning. That could stick you with foundation issues, problem tenants, and property liens that can greatly reduce your ROI and the solvency of your budding business.
Advertise in Transitioning Neighborhoods.
Advertising to homeowners can be a costly endeavor, but the payoff can be great, too, when you target the right areas. And, almost every city in the country has a number of transitioning neighborhoods where you can find motivated sellers of distressed properties. Reach them first before they contact anyone else and you may secure a few deals before a hip area gets too hot to invest in. What is great about this strategy is that not everyone can afford it, so it cuts down on your competition while potentially building up your brand. Of course, that’s also what’s frustrating about this approach. It takes a lot of money to advertise, even if you start with simple postcards and flyers. Still, it’s a strategy that can work given enough money and time—and, thousands of postcards if that’s all you can do.
Together, each of these strategies may help you consistently find real estate deals in almost any market. But, there is no guarantee that, on their own, any one of them will. Yet, trying to successfully incorporate them all is just too much work—especially if you’re trying to grow a business and raise a family. The best, and most efficient, way to buy investment property is to implement a strategy that brings motivated sellers of distressed property to you right away—much like an established and proven advertising campaign does. How do you get a hold of such a campaign? By making one call.
The Best Way to Find and Close on a Deal—Over and Over
I’ve been investing in real estate for a long time, since before my kids were even born. I chose this career path because I knew it had the potential to provide for my family without also stealing time away from them. That is a powerful piece of knowledge to have in your purse or pocket. But, it wasn’t until I became an independently owned and operated HomeVestors® franchisee that I had the resources to act on that knowledge. It was only when I opened my franchise that qualified home seller leads started coming to me. Before I got access to HomeVestors®’ nationally-known and trusted “We Buy Ugly Houses®” ad campaign, which motivates distressed homeowners to reach out directly to me, finding deals that were likely to close was difficult. And, being a full-time parent, I needed something easier so that I could work more efficiently. I found it—and so did Olivia—by joining the HomeVestors team.
Make life as a real estate investor simpler by finding a better way to buy property. Contact HomeVestors to ask how to get qualified leads to come your way today!
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