Real estate investing can be an immensely profitable endeavor, but capitalizing on the right opportunities requires market knowledge and insight. Many aspiring investors are overwhelmed by the complexity of the process — especially if they’re unfamiliar with key strategies.
Fortunately, there are some steps you can take to identify lucrative real estate investments and make sure that your money is well-spent. Here are five tips to help you ensure great returns on real estate investments.
A few ways to get started.
Research the Local Market
When you’re looking to invest in real estate, it pays to research the local market.
Find out what properties have sold recently and for how much, as well as what kind of rental income is available in your area. Knowing the going rate for certain types of property will help you determine whether a property is worth the asking price.
Additionally, understanding the potential difficulties of being a landlord in your local market — from skyrocketing insurance costs to tenant rights issues — can help you make sure that any investment is a sound one.
Conducting thorough market research can give you an advantage over investors who don’t take this step – and potentially lead to great returns on your real estate investments.
Organizing a Professional Team
Attorneys & Title Companies
When investing in real estate, it’s important to assemble a professional team to help you through the process. From qualified real estate agents to experienced attorneys, having a team that can provide insight and advice is essential for success. A good real estate agent will have knowledge of local markets and be able to negotiate on your behalf if needed. They can also help you find properties that meet your needs and budget.
Working with real estate attorneys familiar with real estate law and title companies. Real estate attorneys help with contract negotiations and closing documents, which is key for ensuring everything is properly documented and following all local laws. They can help you to create and negotiate contracts. They can also ensure a clear title and make sure there are no liens on the property.
You will also want to network with experienced niche lenders that offer specialized funding for investors such as Fix-n-Flip funding, DSCR (Debt Service Coverage Ratio), Hard Money, Bank Statement only loans, and Transactional Funding. Most of these niche lenders will also allow you to close in your LLC or business entity. Most can close these types of loans in as little as 10 days. A great lender can help you acquire great deals with easy, quick funding solutions to make it easier to acquire properties when some funding is required or necessary to move forward with the deal.
With everything, you will want to do your due diligence. Not all lenders are created equal. Some charge an absorbent amount in fees. Some take way too long to close and will have your deal in quick-sand. You’ll want to make sure you procure great financing options for your next real estate investment.
Definitely a must-have. Is having your contractor and inspector inspect homes before you pull the trigger to make sure there are no adverse effects on the home. And if there are, you have the budget and the tolerance to deal with those issues. A good inspector can identify issues about the home that you may miss. We tend to look with “googly eyes”, rather than with eyes of judgment and proper assessment. A good inspector can outline issues such as mold, lead base paint, plumbing & wiring issues, roof leaks/damage, septic tank issues, etc.
Having contractors ranging from plumbers, electricians, pool service, trash-out crews, and general contractors is crucial. You need a team of contractors that you can trust and that will get the work done on time. They also need to be reasonable and competitive when it comes to pricing their services. Remember, you are in this business to make a profit, not just a long list of “friends”.
Finally, having an accountant or financial advisor on hand can help you understand tax implications and other legal requirements before making a purchase decision. Altogether, these professionals can give you the confidence that comes from understanding all aspects of the buying process.
It’s time to start looking for properties
There are an unlimited number of ways to find properties in your local real estate market. Here is a short list to help you brainstorm:
MLS (Multiple Listing Service)
Finding real estate investment deals using a Multiple Listing Service (MLS) can be a great way to uncover potential investments. The MLS is an extensive database of properties available for sale, pending, sold, and expired. It can provide real estate investors with access to market data that is otherwise not publicly available.
A piece of advice is to search for properties not only for sale but properties the listing expired. Why expired, because those properties for whatever reason could not sell. It may have been due to the unrealistic desire from the seller to overprice their home, or they refused to negotiate terms such as concessions for repairs, or some other reason like subpar marketing efforts by their listing agent, or maybe the property itself was just not desirable for a traditional buyer.
Additionally, the MLS also provides key information about listing agents and brokers, allowing investors to reach out directly in order to negotiate better terms for their deals. By leveraging the data found on the MLS, investors can identify undervalued properties, target markets with potential appreciation, and find motivated sellers who are looking to offload their assets quickly. Furthermore, they can track market trends and stay up-to-date on industry news, allowing them to make smarter investment decisions over time.
Look for Motivated Sellers
When searching for real estate investment deals, it pays to look for motivated sellers. These sellers might have personal challenges such as job loss or death in the family that make them keen to sell their property for a lower price. They may also be looking to move quickly, creating an opportunity for you to potentially purchase the property at an attractive price. To identify these individuals, research recently sold properties and look for owners who sold quickly or below market value.
Additionally, online classifieds can provide insight into motivated sellers. Finally, don’t be afraid to approach owners directly; often times they’ll already be looking for a buyer and will be open to negotiating a good deal for both parties. By locating and working with motivated sellers, you can find great opportunities without having to compete against numerous other buyers in a bidding war.
Forsale By Owners
Finding real estate investment deals through for sale-by-owners (FSBO) can be a great way to save money and find good investments. Not only can you often buy properties at a discount, but you’ll also avoid paying commission fees to agents. To get started, search online for FSBO listings in your area or areas where you’d like to invest. You can also look for additional leads by visiting local foreclosure auctions or searching neighborhood bulletin boards.
Once you identify potential real estate investment properties, contact the owners directly and negotiate the best deal possible for both of you. It’s important to do your due diligence when dealing with FSBOs as there may be more involved than just making an offer. Being knowledgeable about the process and any relevant real estate laws will help ensure that everything is handled properly and legally. With patience and research, finding great deals through FSBOs is definitely possible.
It’s best to reach out to owners that have had their property listed for some time, such as 60+ days. They will break down eventually and either list with a realtor or sell privately at a lower price. Most FSBO list prices are overpriced which is why they are still on the market. However, you may find some that will be willing to negotiate and since there is no real estate commission involved, you may have a better chance at getting a great deal.
Finding real estate deals through bird dogs can be a great way to generate high returns on your investments. Bird dogs are individuals who look for potential deals, such as foreclosures or motivated sellers, and then bring them to investors’ attention in exchange for a finder’s fee. It’s important to build relationships with bird dogs in your area or areas where you’d like to invest. You can do this by attending local real estate meetups and events or by joining online forums and connecting with experienced bird dogs.
It’s also important to understand the agreement between you and the bird dog prior to any deal being made; clearly define expectations on both sides so that there is no confusion regarding the finder’s fee once a deal is closed. Lastly, time and effort may be required to successfully find good deals through bird dogs, but the rewards are worth it; with just one good deal you could easily make back what you invested in finding it.
Finding real estate deals through bandit signs can be a great way to get high-return investments. Bandit signs are small signs you place in strategic locations which advertise properties for sale or rent. To get started, it’s important to research your target markets and identify areas where bandit signs will generate the highest response rate.
You also need to be knowledgeable about local real estate laws and ordinances as there may be restrictions regarding the placement of these types of signs. Some local ordinances will fine you for putting signs out in certain areas. Once you familiarize yourself with these regulations and have identified appropriate areas, you can start creating sign designs and buying supplies for posting them around town.
There are companies like Signs On The Cheap, that will charge around $84/per 100 signs (depending on style, size, and quantity). They may charge extra for the posts/stands. Do some research in your area to find the best deals. It’s important to note that it may require time and effort to find good deals through bandit signs, but if done correctly the rewards can far exceed your initial investment.
Social media networks, such as Facebook and Twitter, offer a platform for individuals to connect, network, and share information about potential real estate opportunities. When starting out, it’s important to identify your niche and target markets; this will help you reach out to the right people and increase your chances of success. You should also create content that is engaging and shareable; this could include helpful advice or tips on investing in real estate or even success stories from previous investors.
You should focus on platforms where real estate images and videos can go viral pretty quickly like Instagram, Facebook, and Tik Tok. Make sure that your pages are set up properly and include your contact information and website that showcases your properties and what you are looking to invest in. Share photos and videos with your properties, your renovations, your buyers, “things to avoid when buying real estate investment property”, and create segments that will engage your audience and keep them coming back for more content.
Finally, remember to be consistent in your posting schedule; if you want people to take notice of your content, you need to ensure they know when they should expect new updates. While it may require some effort on your part, with the right strategy you can leverage social media channels to find lucrative investment opportunities.
Finding real estate investment deals through YouTube can be a great way to find properties at a discount. By using the video-sharing platform to find motivated sellers, bird dogs, and other professionals in your area, you can get ahead of the competition. To get started, it’s important to make sure you’re creating quality content that will both attract viewers and provide value.
You should also use relevant keywords in your video tags as this helps potential leads find your content quickly. Once you have created some quality videos and developed an audience, you can start targeting potential deals by posting about properties for sale or rent, as well as specific areas where you are looking for investment opportunities. With YouTube being such a popular platform it gives investors access to motivated sellers from all around the world; if used correctly this could lead to finding profitable real estate investment deals with very little effort.
BNI and Meetups and other networking groups can be a great way to find real estate investment deals. By joining local or online communities dedicated to real estate investing, you can gain access to an array of resources and people that can help you with your search. You should also be very specific when searching for these groups and narrow down your criteria by including criteria such as preferred investment areas and types of properties you are interested in. CI Connected Investors is also a great resource to connect with other investors.
Once involved in the group, it’s important to stay active and contribute to conversations; this will help build relationships and trust with other members which can lead to good deals being brought your way. Networking groups are also a great way to learn from experienced professionals in the industry so pay attention to the advice given and look out for common trends when looking at properties.
Finding real estate investment deals through industry professionals is often considered one of the best methods for locating real estate investment properties. By building relationships with local agents, developers, mortgage brokers, and other industry professionals, you can access exclusive deals that are not yet available to the public. It’s important to remember when networking with these individuals to be respectful and friendly as you don’t want to damage any potential relationships.
One of the best ways to do this is by offering something in return; whether it be a referral or something valuable that they are seeking. In addition, attending events such as seminars or workshops can also help you gain valuable information and build relationships with people in the industry. Finally, don’t forget about online resources such as LinkedIn, as these can be great places to network and stay up to date on the latest trends within real estate investing.
Direct referrals are often a great way to find real estate investment deals. Word of mouth can direct you to exclusive properties and potential real estate investments that you may not find through other channels. It’s important to build relationships with individuals in the industry such as real estate agents, developers, and mortgage brokers who have access to sensitive information regarding potential deals. You should also reach out to personal contacts such as friends, family members, colleagues, and other investors if they are aware of any properties that may be up for sale or rent.
Keep in mind when searching for direct referrals that it takes time and dedication so be persistent and don’t hesitate to ask around as you never know what kind of opportunities could arise.
Data list sellers can be a great resource for real estate investors looking to find real estate investment deals. These services provide access to up-to-date information on both properties listed for sale and those that have recently sold, allowing investors to better understand market trends and conditions.
Additionally, they also provide contact information of potential sellers which allows investors to reach out directly in order to negotiate better terms for their deals. Furthermore, data list sellers often offer enhanced features such as property descriptions, comparable sales histories, title company, mortgage balance/amount/company, interest rate, and financial performance data which can help investors assess a property’s investment viability.
By leveraging the data offered by data list sellers, real estate investors can quickly identify undervalued properties and locate motivated sellers who are looking to offload their assets quickly.
Facebook & Google PPC
Utilizing Facebook and Google PPC (pay-per-click) advertising can be a great way for real estate investors to find new real estate investment deals. With these forms of advertising, investors can easily target prospects who are open to either selling or buying properties in the local market or in specific types of properties.
Additionally, leveraging the advanced targeting options offered by these two platforms such as demographic characteristics, locations, and even interests can help investors ensure that their messages reach the right audience and maximize their return on investment. Furthermore, using the analytics tools provided by both platforms, real estate investors can measure the performance of their campaigns and optimize them accordingly.
By combining both Facebook and Google PPC with other marketing techniques such as cold calling or list selling, real estate investors have a greater chance of finding more profitable real estate investments.
SEO (Search Engine Optimization) – Utilizing SEO (Search Engine Optimization) is one of the best ways for real estate investors to find deals. It’s a longer-term play, but it will pay off the most in the end. You build it and maintain it; you own it. It’s your online real estate that will forever generate residual leads for your offline real estate.
By optimizing websites and content for relevant keyword phrases, real estate investors can ensure that their message is visible to potential leads searching on search engines like Google, Yahoo, and Bing. You can use free tools like Google Keyword Planner tool or Answer The Public to find keyword ideas to get you started.
Using tools like this will not only show you details about your initial keyword(s), but they will also give you clues on what other keyword clusters or semantic (intent)and LSI (related) keywords. When you type your keyword into Google, you can also get a good idea of what people are searching for by scrolling down to these 2 sections: “People Also Ask” and “Related Searches”.
Take a look at the image below:
These are great keywords to also target. Keep clicking, and you will find yourself in a “rabbit-hole paradise” of neverending keyword opportunities. (We will do another post in more detail).
Additionally, by creating targeted landing pages with website builders like WordPress or Clickfunnels and utilizing services such as Google Ads or Facebook Ads, investors can quickly target prospects based on their search terms or location while the SEO is building.
Don’t forget to set up your Google Business Profile and make sure to optimize it. You can find a great video here on how to optimize your Google Business profile.
Finally, utilizing local SEO strategies such as encouraging reviews and listing properties on local directories can help improve search engine rankings and bring in more buyers who are looking for specific types of investments. By combining both traditional marketing tactics with SEO strategies, investors’ chances of finding new deals will be significantly improved.
Build Your Own Website
Building a real estate investment website can be a great way for investors to find real estate investment deals. By creating an attractive and engaging website, investors can showcase their properties to potential buyers and easily collect contact information from interested buyers/sellers. Additionally, by utilizing services such as Google Analytics, investors can gain insights into how their site is performing and adjust it accordingly.
Furthermore, utilizing search engine optimization techniques can help ensure that visitors find the site when they are searching for specific keywords or locations related to property investing. Finally, leveraging social media platforms such as Twitter can help promote the website and attract a greater number of visitors. By combining traditional marketing tactics with a self-built website, real estate investors have the potential to increase their chances of finding more profitable investments.
Cold calling can be an effective way to find real estate investment deals, as it allows investors to easily connect with motivated sellers. This method involves calling or emailing a list of potential prospects, such as owners of properties that meet the investor’s criteria. By speaking directly with the owners, investors can quickly gather information about the property and determine if it’s suitable for investment.
Additionally, by making direct contact with buyers, they will have a better chance at forming relationships and negotiating better terms for their deals. Furthermore, cold calling is less expensive than other methods of lead generation such as advertising or attending real estate events. For these reasons, cold calling is a great option for real estate investors looking for new opportunities.
Direct mail marketing can be a great way for real estate investors to find deals. By using data sources such as mailing lists or tax records, investors can identify potential leads and send them tailored messages outlining their investment offerings. Additionally, by leveraging services such as USPS’s Every Door Direct Mail program, investors can target leads based on geographical area and save money on postage.
You can also use tools like REIPro or Propstream to find properties based on your criteria using circle prospecting and then export that data and create a mailing list directly from the software. It’s a very streamlined process.
Furthermore, customizing the content of these direct mail pieces to individual prospects can help increase the chances that they will contact the investor. Finally, tracking response rates will allow investors to gauge how successful their direct mail campaign is performing and make adjustments if necessary.
By utilizing direct mail strategies along with other traditional marketing tactics, real estate investors have the potential to significantly increase their chances of finding profitable investments.
Door-knocking can be an effective method for real estate investors to find great real estate investment deals. By going door-to-door in a certain area or region, investors can identify potential leads, build relationships and discuss their services with potential sellers/buyers. Additionally, by getting to know the people in the area, investors may come across individuals who are looking to sell their property due to financial hardship or some other reason.
Furthermore, if an investor is looking for specific types of properties such as fixer-uppers or multi-family units, door-knocking can be a great way to find those deals. Finally, establishing themselves as a reliable and experienced real estate investor in an area of interest will oftentimes lead to referrals from neighbors which can result in future investment opportunities.
By combining traditional marketing tactics with door-knocking strategies, real estate investors have the potential to increase their chances of finding lucrative investments significantly.
By leveraging the effectiveness of texting, investors can reach potential real estate investment leads quickly and efficiently. Additionally, by segmenting leads based on geographic area, demographics, or purchase history, investors can personalize their messages to ensure they are providing value while still focusing on their investment offerings.
Furthermore, by utilizing automated text programs combined with keyword responses from prospects, results from campaigns can be tracked efficiently and data-driven decisions can be made in order to maximize response rates. You can use a company like Batch Leads if you need leads that have been verified and skip-traced (at additional cost).
Finally, since most people carry a mobile device at all times, investors have the potential to create more instantaneous relationships with prospects than traditional means such as phone calls or mailers would allow.
By combining SMS marketing with other strategies such as door knocking and direct mail, real estate investors have the potential to significantly increase their chances of finding profitable investments.
Driving For Dollars – The process involves driving around neighborhoods, looking for homes that appear to be in disrepair or may have been abandoned. By researching the area and properties further, investors can identify potential deals based on whether the property is listed with an agent or if there are any liens or overdue taxes and other factors such as occupancy status.
Additionally, by talking to neighbors and other local contacts, investors may also come across additional leads which could lead to even more opportunities. Furthermore, by driving for dollars regularly in certain neighborhoods or areas of interest, investors can create relationships with locals who may be able to provide even more information about potential deals.
Finally, by combining this method with other strategies such as direct mail or door knocking an investor has the potential to increase their chances of finding profitable investments significantly.
Real Estate Investing Software
Leveraging real estate investment software like REIPro can not only save you time but help to find the best properties available on the market. You can also use a free trial version of rehab valuation software like RehabValuator. You can Calculate the max amount you should pay for any deal and avoid overpaying. Calculate the feasibility of a rehab project and evaluate multiple exit strategies.
Know When to Walk Away
No matter how eager you are, you have to have patience in this game. Not every deal will be worth your time, money, and energy.
As a matter of fact, most will be a complete waste of time. You will run into many issues that will be out of your control or just not worth moving forward on such as sellers not willing to negotiate their over-priced listings, too much repair work vs margin for profit, sellers backing out at the last minute, the appraisal coming back low, you funding source denies your financing at the last minute. Just to name a few.
Don’t marry the house; marry your plan.
Knowing when to walk away is one of the most important lessons for any real estate investor. Many investors become so focused on a particular property or deal that they are blinded by the potential profit and overlook the potential risks associated with the investment. It’s crucial to consider all angles and not get too carried away when evaluating a deal; if something seems too good to be true, it probably is.
Additionally, it’s important to have an understanding of market trends in order to make informed decisions. If market conditions are rapidly changing, then it could be best to walk away from a potential investment due to the increased risk of loss. Finally, always remember that you don’t need every real estate deal out there and it’s okay to pass on something if you don’t feel 100% comfortable investing in it. Walking away from a bad deal can save you thousands of dollars and prevent future losses down the road.
Dont procrastinate. Just get started
Procrastination is one of the biggest enemies of success when it comes to real estate investing. Delay or avoidance can prevent investors from taking advantage of opportunities and can cause them to miss out on potential profits. Instead, you should develop an actionable plan that outlines the steps you need to take in order to achieve your goals.
This could include researching market conditions, consulting with experts in the industry, forming relationships with key players, finding sources of funding, and more. The sooner you get started on achieving your objectives, the more likely you are to succeed in the long run.
Additionally, don’t let fear or distractions stand in your way; if you want to be successful in real estate investing, then it’s important to stay focused and act quickly when necessary.