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August 2, 2010
A profitable real estate investing business must be fuelled by profitable deals no matter what business model you adopt. The following tips will help you weed out bad deals and focus only on money makers.
Photo: bertdennisonphotography
1) After Repair Value
You must know the Fair Market Value before you can make an offer on any property. When buying houses, I try to work with low market value to be safe.
The value shown by the county records is a good estimate in most cases. It is usually lower than comparable sales of homes sold in the area. In spite of this in a depressed real estate market, property prices can be affected by foreclosures in local area. You might need to team up with a local realtor if you do not have access to the MLS.
2) Repair Estimates
Repair is an integral part of buying and selling houses. You must have a fair estimate of the repairs needed without getting down to the nail and bolt. As you get experienced at looking at houses, you can estimate repairs by looking at a house in 5 to 10 minutes.
I try to work with higher repair estimates to stay safe.
3) Mortgage Balance
You cannot make an offer on the house unless you know the mortgage balance. If the offer you make cannot pay off all the outstanding liens on the property and leave a room for profit, then it is probably not the best deal for you.
If a seller is not motivated enough to provide this information, you better look for another deal.
4) Sale Price
If a motivated seller wants full market value for their property, they are not motivated enough for you. If a seller is looking to get full market value for their house, move on to the next deal. Unless they can leave room for profit for you, then you would better off moving on to the next one.
Sometimes, explaining your numbers to a motivated seller may result in them accepting a rejected offer once they understand how you work.
5) Is It Vacant?
This will tell you how motivated they are to sell their house. If they are making more than one mortgage payment, they will certainly want to sell fast. It also means you can take possession of the house as soon as you buy it.
How do you collect this information?
The easiest way to have this information is to have a good real estate investor web site. The website should serve to convince them you are the best person to buy their property and collect the information you need right on the website.
The form should collect as little information as possible, but just enough to know whether it is a deal or not.
The less information you request the more people are likely to respond via your website. This will save you lots of time because you only talk to motivated sellers whose numbers make sense.
You can then ask them for any information you need as you talk to them.
Source: Free Articles Directory Submission
About the Author
Simon Macharia is a real estate investor in Dallas, Texas. His business is run from a real estate investor website that pre-educates motivated sellers delivering pre-screened and pre-negotiated deals. Click here to see how to pre-screen motivated sellers hands-off.
read comments (3)
March 31st, 2011 at 1:01 pm
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