Thursday, July 9, 2020

How to Find Low Cost High Value Investment Properties in Real Estate

The basic goal of a real estate investor is simply to buy on the low end and resell on the high end. This way, there are no huge losses in such an investor’s portfolio; rather, there are only profitable investments. Yet, while this is a simple strategy to comprehend, what is not so simple to initially grasp is where to find basement bottom prices on higher valued investment properties. 

The following are four tips that should help a real estate investor find some of these lucrative deals.

Follow the Market

As with most markets, the real estate market has cycles and trends. It is rarely a good idea to purchase real estate in a seller’s market. Knowing when it is a buyer’s market is the first key to finding low-cost real estate investments because the prices of even higher-end homes are always depressed in a buyer’s market.

Grabbing Low Lying Fruit

Often the easiest way to pick up low cost, higher valued real estate is by learning how to buy homes in probate. A person who is deceased will often leave a home, a property that turns into a tax burden, to relatives. 

To avoid this tax burden, often people will unload probate properties quickly at a lower than market assessed price point. This is an investor’s opportunity to purchase the house and sometimes everything left behind that may or may not retain value: furniture, jewelry, the car in the garage, and so on.

The Foreclosure Game

Sometimes a person simply has to unload a property, because they have fallen behind in their mortgage payments. In special cases, an investor will simply talk the home-owner into putting them on the title for a nominal fee and the promise that the investor will keep up the payments on the home to preserve the original owner's credit. 

In essence, this can help a home-owner out of a bad financial situation while helping the investor obtain high valued property for little or even no significant money changing hands.

Becoming a Good Negotiator

When browsing through properties for sale, it is often easy to find that one higher valued diamond in the rough that needs some work. Listings will sometimes even call these properties a handyman special. The good news is that the more work that needs to be done to bring the home up to a livable condition, the more points that a good negotiator can bring up when making an offer on such a property. 

By learning how to leverage the negatives of a property during negotiations, a savvy investor can often knock thousands of dollars off of the original asking price of the upper end, expensive homes.

As with investing in any asset class, there are always strategies for finding low-cost properties. The real estate investors' best strategy is to continue educating themselves in the methods that help them discover where the under market valued properties reside. 

Alternatively, a smart investor will learn to make their own opportunities—especially when considering the best way to go about negotiating for a lower price on more expensive homes.

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