Buying investment property isn’t rocket science. But you need to take advantage of all the tips and tactics that can make your business soar. There are many simple things you can do that will help ensure your success. It is essential that you get to know the home values in your farm area. Also, developing a good working relationship with Realtors that work in your target area gives you a leg up on other real estate investors. This can put you at the top of their buyers list when they have an “ugly” house to sell.
Know Your “Farm Area”
First and foremost when buying investment property, you need to get to know the areas where you will be making offers. Your “farm area” is the area where you intend to concentrate your marketing efforts. A lot of this information can be obtained from the MLS (Multiple Listing Service) by doing a search of all the homes that have sold in that area during a specific time period.
What I personally recommend, is that you get in your car every Sunday and hit all of the open houses in your farm area. This is a great way to find out the values of homes in a particular area. When I first opened my home inspection company many years ago, that is exactly what I did. I took a coffee mug with my company name on it full of “goodies” (a pen and pad of paper with my company name and logo, some chocolate, mints, a tea bag to make a cup of tea, etc) and gave it to the agent. This made my visit memorable and really helped to build my business when I was first starting out.
Working With Real Estate Agents
You can use this same principal of going to open houses to meet with real estate agents when buying investment property. Not only will it help familiarize you with the general area, but it will also help you to determine what homes are selling for in your target area. A Realtor that works in your particular farm area is a valuable source of information. Introduce yourself and hand out your business card when you arrive. Let the agent know upfront that you are an investor and that you are doing research in your target area. If they are open to working with investors, and most will be, ask them to add you to their list of investor buyers. When they have a house that might meet your specifications they can give you a call.
Agents get houses all the time that are in need of a lot of repairs or are just plain “junkers”. When a Realtor gets a call from a repeat customer that says they have a run down rental in a bad part of town that they have to unload, that agent just can’t say no to this person. They have to take the listing. What this agent wants is to just get the house sold quickly without investing a lot of time and without having to do any advertising. If they have a list of folks buying investment property that they can call and quickly sell the house to, it is a win-win for everyone. They look good to the seller and you get a great deal! Position yourself so that you are the first person they think of!