Investing in real estate is a massively lucrative money move–but only when you’re getting the best ROI possible.
Real estate investing generates more millionaires than any other industry. However, the saturation of buyers and scarcity of homes for sale can make this tricky even for the more experienced investors.
The first thing to be aware of is that the market is highly competitive right now–and only the seasoned pros know how and where to find the very best deals.
There are 4 must-do steps to making seven figures in real estate, and utilizing the following tips will greatly increase your chances of generating high returns on your investments.
1. Find a Seasoned Pro
Many realtors are also real estate investors. When searching for an agent, be clear that you are looking for an investment property (fix and flip, rental property, multifamily complex, commercial, etc). He or she should also be able to help forecast your ROI for what your intended use is. Be sure to find someone who not only knows the ropes but understands all the tax breaks and laws that govern the local market. The type of realtor you want will also be able to help you navigate all the available financial options, from paying all cash to traditional banking loans and private money lenders.
2. Be Ready to Pull The Trigger
First, you need to know what you can afford. Schedule a free Gap Analysis Strategy Session with one of our experts to discover where your current financial situation lies, what’s smart for you and where your biggest gaps are.
Ideally, cash is king, as it will allow you to bypass certain contingencies such as loan approval and appraisal. You can also close escrow immediately, making your offer more attractive than one that carries financing contingencies. If you are seeking financing, get pre-approved immediately, as this will help you know what you can afford and provide an estimate on what your mortgage will be. Your lender will tell you what timeframes they need to fund the loan and complete contingencies. This pre-approval shows you are serious and qualified, making your offer stronger than someone who doesn’t carry a pre-approval letter. The last thing you want is to miss out on a great deal because you were not able to make a strong offer.
3. Make Your Own Luck
Newly listed properties tend to be the focus of most new investors, but rather than looking for newly listed homes, look for the ones that have been on the market for 120+ days (this is readily found by your seasoned professional and through some light due diligence). The goal here is to find someone who needs to sell and a realtor who wants to make his commission before the listing contract expires. You will essentially get the listing agent on your side and he will be working hard to get your less-than-listing-price offer accepted.
An additional tip here is to send the address of the properties you drive to your realtor. Ask your realtor to search the homeowner through public record and write an offer on the property off-market. Through this method you eliminate the public competition driving the sales price up through a bidding war.
4. Get Creative
Sometimes the accepted offer isn’t always the highest. When dealing with probates, divorce, and trust sales you want to also consider the sellers needs. Often times offering a lease back, flexible escrow terms, or even ridding the property of everything left will make the seller’s life easier and help you open escrow on a highly desired property.
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