So how many of you have heard about all the deals to be found in the housing interest? Heard now is the best time to buy, interest rates are lower than ever, banks have begun lending again, etc., etc? Then how many of you have tried to buy a house, either residential or investment and found that this process is a little more difficult than you anticipated?
I have spoken with a number of people who are seasoned investors who say they are now having difficulty finding properties. A few months ago, there were a lot of great properties ranging from 30K-50K in the Atlanta market and now 5-6 months later, you are lucky if you can find one at all. The problem is, many of the banks have gotten hip to the fact the prices of houses are low and have turned into landlords and some have decided to get a piece of the pie by buying low priced houses by the 100s and reselling them to us! Go figure! Some of the houses have even gotten pulled from Auctions and websites the day of because the lenders are working with the homeowners to prevent foreclosure, but the vast majority are large financial institutions trying to make money.
So how do we get around this hurdle? You must adapt your strategy. Now is the time to begin using “creative financing” and identifying houses before they even go on the market. How do you do this? Here are a couple of simple tips.
1. Knock on doors. Visit the areas that homes you want to invest in and ask them are they interested in selling. This way, you get to the houses before they are listed and cut out the opportunity for the big banks to buy them. You can ask the person if they would be willing to Quit Claim Deed the house to you, meaning their name is on the loan, but you have the deed. You eliminate the need for financing this way.
2. Send out mailers. Identify houses that look like they need some repair work and send out a flyer saying you buy houses. Follow up within 1-2 weeks with a second mailer.
3. Find someone with cash. Cash is King! If you have someone with lazy money, friend, family member who retired, or someone who is earning less than 1% on savings, ask them if they would be interested in investing with you. Use their money to buy houses cash. You can get better pricing with cash, plus some homes can’t be financed because they prices are so low.
4. Try to buy houses for 25 cents on the dollar. Today’s market still has not totally recovered so you should not be paying retail prices for houses. You can get good pricing like this buy buying from developers with unfinished projects or buying in neighborhoods with high foreclosures.
5. Build a team. Make sure you have a good Realtor who specializes in foreclosures, HUD, Short Sales, etc. Be sure to have an Attorney, Builder, Contractor, and maintenance person on hand. Also network with other investors. They may have deals they are looking to share.
6. Take advantage of newspapers or magazines that give you information about houses in your market. In Atlanta, we get the Daily Report. It list public notices including Foreclosures, Tax Liens, and Judicial/Non-Judicial Sales of properties.
7. Think outside the box. You can always find a way to get a property. People have owned property in EVERY market, so even if it seems difficult, keep plugging away. Talk with other people who are buying houses and get some insight from them and most of all…don’t give up!
