So how do you find EQUITY RICH deals that will make money on the purchase ? Here are some tips I ’ ve acquired from personal experience that will help secure your next legacy property :
1 . Know Your Market – Whether you invest locally or across the country , a sophisticated investor knows their “ farm ”. This is the area that is going to produce income . One needs to know exactly what the properties are going for . Learn your farm like the back of your hand . A sophisticated investor instantly knows a deal when they see one because they know their market so well . We know if the deal has equity or not . If you ’ re ready to invest , study your markets daily , spot the deals , and call the listing agents right away to get the scoop on the property before anyone else does .
2 . Leverage Existing Equity – The old adage , “ It takes money to make money ” is often true in real estate . Knowledgeable investors can structure deals with OPM ( other people ’ s money ), but until you can convince other individuals or a privatelending company to invest in your deals , you alone will be the responsible party . Figure out how much cash you have right now . How much cash can can you get in 30 days ? What are your assets ? What are your liabilities ? Can you qualify for a traditional 30year mortgage at 3.5 %? Will you be rehabbing instead of purchasing longterm ? What ’ s the least you need to put down to qualify for a shortterm private money loan at 10 %?
Image by Gerd Altmann from Pixabay
3 . Have Cash / Financing Ready to Go – Financing is key for every deal . Yes , someone has to put in actual money to close escrow . This goes back to tip number two . Get prequalified for a loan first , talk to a capital partner to understand exactly how much you will need . Will they finance the rehab as well ? Will you have to pay repairs separately ? The bottom line is : Deals , especially those with a lot of existing equity , are being chased by many investors . In this market , competition is fierce . The deals with equity are always going to be snapped up by those who are prepared and ready to CLOSE .
4 . Let Agents / Brokers / Wholesalers Make Money Too
– It ’ s very very difficult for an investor to do every aspect of a real estate deal . Sooner or later they ’ re going to need people , a team of experts who can help them . Don ’ t be greedy on your journey towards millions . Never burn people on their commission of a few thousand dollars . Agents and brokers make their living solely with commissions , please respect their time and knowledge .
Building great relationships with realty professionals will encourage them to contact you before that equityrich property is shared with world on the MLS ( Multiple Listing Services ).
5 . Venture Outside Your
Market – The time will come in every investor ’ s career where they will have to venture outside of their market . Perhaps they live in an expensive area or they get tapped out by high and quick appreciation . Gong to a second or third market can help one continue to grow a portfolio , but do so cautiously . The first rule of Know Your Market applies to every city . Remember , pricing can change from one BLOCK to the next . Study your target city and become familiar with it . One way is by tapping into the regional MLS , which is generally free and public though the local Board of REALTORS . When I choose a target area to invest in , I also like to start reading their local newspaper online . You ’ ll discover a lot of information that can help you , plus learn who the Top Producers are too — successful brokers always advertise in their local media .
21