The Top 5 Places to Find Bargain Real Estate
“A bargain is not simply buying a cheap piece of property.
A bargain is holding the property cheaply.”
This is the debut essay of the “Top 5” weekly article series. For some time now I’ve been thinking: “Why does everyone have a “Top 10” list when a “Top 5” can do the trick with the most essential and effective information per the particular topic?” Items 6 through 10 are usually filler and not of much importance compared to the essential “Top 5.” There is a website I recall called “Top7business.com.” Here you will find articles with headings using the words, “Top 7 Ways and Top 7 Things and Top 7 Reasons, 7 this and 7 that” and so on. Why seven? The number seven is considered to be a lucky number and most people seem to like the number seven—looks good, sounds good, feels good, feels right. But other than that, I think a “Top 5” list cuts through a lot of the unnecessary reading and time spent thinking about items 6 through 10.
The important thing is getting through the article quickly and getting down to business with the right information to propel you in the right direction for fast results. So, each week part of our new blog of the Flipping Brothers Newsletter (The Flipping Gazette) format (FlippingBrothers.com), we will present a new series of writings covering the “Top 5 ….” They will be concise—to the point and readable in less than three minutes. This will arm you with the information you need quickly. If you are interested in a particular “Top 5,” email us and let us know. We will design a “Top 5” list for you.
Don’t get us wrong, we will still offer lengthier articles that get a bit more in-depth. We know there is just so much that can be said in a “Top 5” list. The idea is to present information to you quickly, concisely and effectively, and let you get on your way. Now, as the article states, let’s move to the Top 5 Places to Find Bargain Real Estate.
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As you may know, bargain real estate is everywhere you look—you just have to look for it, keep your eyes open and be observant of what’s around you. Here is our Top 5 Places to Find Bargain Real Estate:
(1) Online. Begin with the MSL (Multiple Listing Service). If you do not currently have access to the MLS go to Realtor.com or Loopnet.com for multifamily and commercial property. For single-family homes, you would search the MLS and Realtor.com. You can also go to eBay and look for property in your target area or in areas that fit your criteria. As you mature as an investor, you may want to expand your search area. If you are planning to “flip” properties, you can buy anywhere, provided you are buying at a low enough prices to insure a reasonable profit.
These three primary websites (MLS, Realtor.com, and Loopnet.com), will allow you to access information quickly and you can obtain preliminary info for selected properties without leaving your house—that is, if you have an internet connection at home; during this day and age it is essential.
You must know your target market to make your visit to these sites worthwhile. If you start at Realtor.com, these are the steps you take to begin your search: (1) Enter the zip code of your target area. You can also enter the city and state if you do not know the zip code; (2) while searching for single-family homes, enter your price range in the spaces indicated. You are looking for cheap property, so enter amounts like $20,000 to $100,000. You will have to know a little about the price ranges in your target area, but starting low will present some excellent property choices that pop-up on your screen; (3) next, enter number of bedrooms (make it three) and number baths (make it one); (4) on the left side of the screen, check the single-family home spot and delete all the others. You are not interested in land or condos—only singe-family homes; (5) look for homes that are at least 1,000 square feet in size; and finally (6) press enter and check out what pops up. Start from the lowest priced houses and move your way up.
When searching for properties on eBay, pay close attention to houses and property for sale with “no reserve” price. You can do a lot of research right on the internet if you are not familiar with a particular area.
(2) Drive the area. Once you’ve decided on a particular area (target market), drive up and down the streets slowly and look for signs, such as “For Sale by Owner,” or “Foreclosure,” or other signs indicating a possible distress sale. Get to know the area. Call on signs of houses that are unkempt, rundown. These types of properties could be good investments with motivated sellers. Motivated sellers sell at bargain prices with good terms. Remember this, fair terms and a low price equals bargain.
3) Other landlords and investors. One of the best places to locate bargain property is from other landlords and investors who are overextended or retiring from the business. Joining a local real estate investment club could start you in the right direction to meet other investor or obtain referrals. Many of the bargains my brother John and I have purchased came from other investors. This is also a good way of acquiring a bundled package of properties at a good price.
4) Neighbors and acquaintances. Let your neighbors and acquaintances know you are a real estate investor and open to investing in all types of property. You want them coming to you and dropping you referrals. Someone always knows someone who wants (needs) to sell and is looking for a quick and painless closing.
5) Auctions. The two most popular auctions are held at your county court house, or auctioned by U.S. Home Auction. Nearly all the homes are foreclosed properties. Some good deals can be had at auctions, but bad ones can be had too. It takes time and research on your target property if you plan to bid at an auction. Property at courthouse auctions may have city leans and other encumbrances attached to them; hence, you should do enough research to ease your mind before biding. And again, you will need to know your target market very well, not to over bid.
Post-foreclosed properties that are owned by the lender can typically be purchased at a discount. You will usually need to make a cash offer (your cash or someone else’s) to get the deal accepted.
Always estimate how much you will be investing in fix-up dollars before you bid on or buy any property. Stick with a 50% to 60% percent per return goal on property and fix-up costs. With a reasonable margin, you’ll be able to sell in an emergency at a good price and still secure a worthwhile profit.
For more information on where to find real estate at bargain prices and how to flip houses like a pro, get your copy of The Millionaire Real Estate Flippers (a comprehensive book to give you the confidence you need to jump into the lucrative world of flipping fixer-uppers). If you would like to participate in flipping houses with us, visit www.FlippingBrothers.com or email me at Mitch@MitchFreeland.com