How to Find Profitable Investment Properties
By Jake Borjas
Have you reached a point in your life where you know you have to do something to
increase your retirement income or you want to find a way to increase your spending
cash? This article will provide the necessary background to help you find profitable
investment properties. Armed with your property investment objectives, it is time
to go out and find profitable properties.
However, before you start your search you need to remember that we will be looking
for investment properties where we can make a profit from motivated sellers. If
the seller is not motivated, you will not be able to negotiate a good deal. I will
repeat it again, you make the profit when you buy not when you sell. The road begins
by developing a list of potential properties using the profile that you developed
during your objectives session. There are several sources of properties:
Real Estate Agents. You will get better results if you take the
time to interview several Real Estate professionals and ask them if they own any
investment property themselves. If you are able to locate one of this professionals
in your area, hold on to them. They will understand your needs and they will be
invaluable helping achieve your objectives. Real estate agents can be an excellent
source of undervalued investment properties. After they get to know you, they will
search you every time that a good property hits their desk. They can also help you
determine the market value of the potential property. Your Agent can provide you
with a list of all the investment properties that meet your requirements.
Foreclosures Lists: This is my favorite way of finding investment
properties. The main reasons for foreclosures are missed payments due to job interruptions,
divorce, and health problems. The easiest way to get a hold of this list is to perform
an internet search in any of the main search engines for the words ‘foreclosure
list”. The monthly subscription price varies from $28 to $35. This money is well
spent. I have found very nice investment properties using this method. For instance
in 2003, I found a 4 year old house with 3 bedrooms and 2 baths in a nice neighborhood.
I knew that this was a good deal because the bank was asking for $87,000 and the
original sales price was $105,000 two years before. In addition, the tax assessor
had valued this property for $106,000. You are able to obtain all this information
without leaving your house. The internet is a wonderful tool to get information.
After looking at the house, I decided that this was an excellent deal. The Real
Estate Agent almost fell off his chair after he saw my initial offer of $69,000.
After more negotiations, I ended up buying the investment property for $72,000.
The current assessed value is $115,000.
In order to use this method, you need to take the following steps:
- Review the daily foreclosure list for your area.
- Select the properties that have been on the list for less than 30 days.
- Circle the investment properties that fit your budget.
- Pay special attention to the properties that are located in nice neighborhoods.
They are the first ones to go.
- Only select properties that are within 50 miles from your home.
- Use the internet and access the local tax records and obtain the house tax value.
- Use the internet to access zillow.com. This site will give you another clue as to
the value of the property.
- Ask your Real Estate Agent to show you your potential investment property.
- If this is your first investment property, you might want to take a general contractor
with you or some one who knows about repairs. They will advise you if the property
has any major issues.
- After you have gone through all these steps, you should be ready to make an offer.
This is one of the best steps if you enjoy negotiating. This will be the topic for
my next article.
Other methods for finding investment properties that I have used less frequently
include: local newspapers, real estate magazines, driving around, government websites,
fliers, talk to the local chamber of commerce. It takes a bit or work to recognize
a profitable deal. However, this article has moved you miles ahead of your competition.