Investors
Now is a great time for investors to buy Real Estate. Not just because the prices are dropping and sellers are getting more desperate to sell, but because a new project can keep you busy through the winter. I am talking more about flipping properties than holding properties for rent. If an investor begins a flip in late November or December they can have the property on the market in the first part of the spring, the perfect selling season. If you are looking to hold properties, the winter is also a great time to buy. You won’t necessarily have the motivated sellers, but you will be able to buy properties that will be fully rented and stay that way throughout the winter.
Don’t forget to call or e-mail me so I can send you information on the latest investment properties.
FLIPPING TIP – Don’t put more money into a property than you will be able to get out. Many first time flippers make the mistake of putting too much money into a property, justifying it with “I’ll be able to sell it for more.” Don’t bet on it. This is an easy trap for the unwary flipper. Be careful. Don’t splurge on items if it will price you out of the area. Remember, you make your money when you buy the property, not when you sell it.
RENTAL TIP – A good rule of thumb is the 1% rule. If the rents equal 1% or the potential sales price then you are looking at a good investment. Other factors will contribute to determining whether a property is a good investment or not, but it is a handy little tool when you are browsing. With bigger properties, this may not be a good indicator, also with newer properties. Again, many factors will determine which property is the best for you. That is why a good investor needs a good Realtor with knowledge of the market and rentals in general.
FORCLOSURES – The best way to find pre-forclosure properties is to watch the newspaper. A good Realtor will know where to look to find forclosed properties. The HUD website can help you find forclosed properties as well as the Fannie Mae and Freddie Mac websites. Realty Tracs is another website that my clients use to find good forclosure properties, but that subscription costs money. The newspaper is the fastest, easiest, and cheapest way to find a good pre-forclosure, and a Realtor is a good way to find listed forclosures.
DISTRESSED PROPERTIES – If you see a property with an overgrown lawn, that is a potential indicator that the property is distressed. This is where you should proceed with a level of caution. There are legal ways to find out the property owner and contact them, and illegal ways to do so. If you are seeking distressed properties you should call or e-mail me and I can help you search for the right investment.
FINDING THE RIGHT REALTOR – When Realtor shopping, as an investor, you will want to find someone with an excellent knowledge of the market and neighborhoods. You want someone who can tell you what the potential rents for a property may be as well as potential resale value. You will want someone aggressive, and not afraid to put in low offers. Remember, a good investment gain is made when the property is purchased. You will also want someone you can get a hold of. Communication is key in the Real Estate Market. As an investor you will need up to the minute property details, you will want to know when the best properties come on the market (or even before in some cases) so you can buy the good ones right away. If you are in a hot real estate market like Billings, where there are several hundred investors all trying to buy the same property, you really need an agent who can make offers on the fly. You may also want to consider giving your agent a limited power of attorney to allow you agent to write and sign offers for you with a phone call if you are out of town often. Hopefully, when you are seeking a good Realtor you will think of me. I love working with investors and would love to be your agent.
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