{"id":5816,"date":"2018-03-05T14:50:17","date_gmt":"2018-03-05T19:50:17","guid":{"rendered":"http:\/\/camerondirect.com\/?p=5816"},"modified":"2020-12-10T16:20:12","modified_gmt":"2020-12-10T16:20:12","slug":"investment-property","status":"publish","type":"post","link":"https:\/\/realestatewealthnetwork.com\/blog\/investment-property\/","title":{"rendered":"5 Vitally Important Factors That Exist In Every Good Investment Property"},"content":{"rendered":"

How do you know if an investment property is a truly GOOD deal?<\/p>\n

I get this question often and the answer is\u2026there are several simple, yet effective, ways to figure out if an investment property you\u2019ve found makes sense as a deal for you.<\/p>\n

Let me be very clear, it\u2019s not about whether I LIKE the property. That has absolutely nothing to do with it!<\/p>\n

Pro Tip:<\/strong> Take emotion out of the equation when evaluating an investment property.<\/p>\n

You see\u2026to me, these houses are simply inventory. In fact, some of the deals I do these days are on investment properties that I\u2019ve never even seen.<\/p>\n

For me, whether to do a deal or not is determined by looking at 5 significant factors \u2013 after I\u2019ve used these to evaluate the property, I\u2019ll know if it\u2019s a good deal or not.<\/p>\n

Now, let\u2019s dig into the 5 factors that you should look for...<\/p>\n

#1: A Highly Motivated Seller                       <\/strong><\/p>\n

In many cases, we\u2019re dealing with a highly motivated seller. For instance, it might be a vacant house, an absentee owner, a foreclosure situation, a divorce, probate, etc...Any of these can lead to you buying at a deep<\/strong> discount and other than in unusual cases, if we\u2019re not buying at a discount, we DON\u2019T buy at all. Period.<\/p>\n

Just know that there are 2 types of sellers:<\/p>\n

1) Those who want <\/em>to sell.<\/p>\n

2) Those who need <\/em>to sell.<\/p>\n

We ONLY want to work with the latter.<\/p>\n

Remember\u2026there are all kinds of motivated sellers\u2026absentee owners, vacant houses\u2026even HUD and the banks are motivated sellers. Being motivated is a vitally important part of our criteria.<\/p>\n

Motivated seller resources:<\/p>\n

    \n
  1. Motivated Seller Data Feed \u2013 Use this to find over 5.7 million ultra-motivated sellers nationwide. With the ability to target up to 20 motivated seller types (including vacant houses, absentees, foreclosures and more) this is the most powerful motivated seller resource to date!<\/li>\n
  2. Vacant House Data Feed \u2013 Use this to find verified vacant house leads nationwide. There are more than 1.7 million of them hiding in plain sight right now. (You can even get phone numbers on a lot of them so you can start contacting sellers immediately!)<\/li>\n
  3. Absentee Owner Data Feed \u2013 Use this to search for absentee owners in your area (or across the country.) This is MUCH easier and more affordable than any other absentee owner source I\u2019ve found!<\/li>\n<\/ol>\n

    Often, motivated sellers that we identify can be hard<\/em> or almost impossible<\/em> to locate. Why? Well, it all goes to back to the reason they\u2019re motivated in the first place. They may owe money and be avoiding creditors or they may be going through a divorce or probate and they don\u2019t know that selling the house fast is even an option. Whatever the reason for their motivation, if YOU can\u2019t easily find them, then, more than likely, neither can your competition!<\/p>\n

    To resolve this particular issue, you\u2019ll need to run a skip trace. I use Real Estate Skip Trace on all hard-to-find owners that my competition can\u2019t touch.<\/p>\n

    \"\"<\/p>\n

    #2: Needs Repairs<\/strong><\/p>\n

    If the investment property is in need of repairs, that allows for an even deeper discount.<\/p>\n

    Repairs drive the price down further than it actually costs to do the repairs. So, for every dollar of repairs needed on the house, we will take the discount down by no less than $2.<\/p>\n

    #3: Good Location<\/strong><\/p>\n

    Of course, this one should be ingrained in your mind\u2026location, location, location.<\/p>\n

    The location MUST be a good one in order to be a good deal.<\/p>\n

    The investment property has to be in a place where people (mortgage-qualified buyers) actually want<\/em> to live.<\/p>\n

    #4: Appeals to First-Time Home Buyers<\/strong><\/p>\n

    If the investment property is affordable and in a place where people want to live, then it will most likely appeal to a first-time home buyer!<\/p>\n

    First-time home buyers have access to the only free-flowing mortgage money in the marketplace right now. In fact, if you\u2019re looking to buy and sell houses\u2014wholesale or rehab\u2014I can\u2019t stress strongly enough that you should stick to entry-level houses<\/em>.<\/p>\n

    Here\u2019s a great example\u2026<\/p>\n

    One of my contacts was raving about an investment property that was worth $2 million. It had been on the market for 5 years and could be snapped up for just $750k. He asked me if I wanted to partner on the deal.<\/p>\n

    My reply:<\/p>\n

    \u201cThe reason it\u2019s been on the market for 5 years is
    \nbecause it\u2019s overpriced. Even if we did buy it, how many buyers
    \nare there for a $2 million house?\u201d<\/em><\/p>\n

    You might be asking, \u201cHow is this such a great example for this particular factor?\u201d The answer is because as the price of a property goes up, the number of people who are capable of buying it goes way down. What we\u2019re talking about here is declining demand equaling declining liquidity. Or to put in layman\u2019s terms\u2026 we should fish where the fish are!<\/p>\n

    \"\"<\/p>\n

    #5: The Numbers Work<\/strong><\/p>\n

    The final reason is because the numbers simply make sense.<\/p>\n

    First, we look at all the comps...<\/p>\n

    I know what it will sell for after repair, and I know the cost of repairs, so now I know the price that I will not exceed. If I can\u2019t buy it for that price, or less, I\u2019m not going to buy it. Plain and simple. It\u2019s a no.<\/strong><\/p>\n

    We can NEVER pay too much for an investment property, no matter how much the seller may try to steer us otherwise.<\/p>\n

    Beware<\/em><\/strong>! <\/em><\/strong>A Realtor will want you to pay too much. HUD will want you to pay too much. Just about everyone wants you to pay too much. You must be the tough one who holds the line and says no \u2013 after all, you\u2019re basing your decision on the numbers\u2026which, as they say, don\u2019t lie.<\/em><\/p>\n

    Final Note<\/strong><\/p>\n

    Remember, it\u2019s never a good idea to become emotional<\/strong> about an investment property. Things will get messy if you do!<\/p>\n

    Keep in mind, it\u2019s JUST inventory.<\/p>\n

    Always be sure to take emotion out of the equation.<\/p>\n

    Your Turn\u2026<\/strong><\/p>\n

    Do you have another tip for determining whether an investment property is a good deal? Have you ever gotten emotions involved in a deal? How did it turn out for you? Leave your comments below. I\u2019d love to hear your thoughts!<\/p>\n

    Regards,<\/p>\n

    Cameron Dunlap<\/p>","protected":false},"excerpt":{"rendered":"

    How do you know if an investment property is a truly GOOD deal? I get this question often and the answer is\u2026there are several simple, yet effective, ways to figure out if an investment property you\u2019ve found makes sense as a deal for you. Let me be very clear, it\u2019s not about whether I LIKE […]<\/p>\n