How Real Estate Investors Identify Profitable Deals (home improvement loans)

July 29th, 2010 admin Posted in realestate |

By Simon Machcria

Successful real estate investing requires that you attain deals that will leave a profit for you no matter how you buy and sell houses.

Here are a few tips to guide you on how to identify profitable deals for your real estate investing business.

1) Market Value

You must have a property market value before you can buy it. When buying houses, I try to be conservative so as not to over-estimate the value of the house.

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. However in a depressed real estate market, the market value can be affected by foreclosures. If you do not have access to the MLS, you might need a local realtor in your dream team to run comps for you.

2) Renovation Estimates

Repair is an integral part of buying and selling houses. You must reliably estimate repairs quickly without getting too detailed. Once you get used to looking at properties, you can be in and out of a property in 5 to 10 minutes with an estimate of the repairs required.

I try to work with higher repair estimates to stay safe.

3) Mortgage Balance

You cannot make an offer on a house unless you know what is owed on it. If your offer cannot pay off the mortgage and leave a profit for you, then you may be better off looking for another deal.

If a seller is not motivated enough to provide this information, you better look for another deal.

4) Sale Price

If a seller wants full market value for their house, they are not motivated enough for you. If they cannot accept an offer that leaves a profit for you, that is not your deal.

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 Occupied?

This will tell you how motivated they are to sell their house. Sellers who make more than one payment will want to sell fast. It also means you can take ownership of the house as soon as you buy it.

How do you collect this information?

It is necessary to have a good real estate investor website to receive this information. The website should pre-educate them how you work and allow them to submit their house information directly on your website.

The form should ask for as little information as possible but just enough to know whether you have a deal or not.

The less information you collect the more response you will get through your website. This will save you lots of time because you will not talk to sellers whose houses you cannot buy.

You can then collect more information once you talk to them.

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.

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