Bank Owned Properties still represent one of the greatest opportunities for saavy Real Estate Investors in the market today. See how it works from the inside out. This 5 part series is an entire REO Investing Course in disguise, so take advantage of these implementable strategies! 

 

HOW TO CHOOSE YOUR MARKET

A couple of different factors can affect your decision when choosing your market. Keep these things in mind when you are doing your research.

Competition

Competition is always a consideration when going into an investment market. Review the section in chapter 2 about using your competition for determining real estate values. Here are the basics:

  1. Know your competition: look them up, join their lists, ask title companies, ask Realtors.
  2. See what kind of corner they have on the market.
  3. copy them if you can: If they are successful at something, find out how they do it and replicate that.

Demand

Do people want investment properties in your area? If so, how many? Would people buy from out of state? Would people buy from out of the country? What is the investor activity level in your local market? How long are bank-owned properties sitting on the market? compare your market to others that have been acknowledged as good investment markets.

Whatever it takes, you need to figure out the demand for properties in your area. So get to work. Poll other investors, ask Realtors, look up recently sold comps. Find out what people want and then find a way to give it to them!

Know which areas are good for different strategies. One neighborhood may be perfect for rentals, but the numbers won’t work for retailing. Use the strategies in chapter 2 to help you with this process.

 

1_123125_123073_2207907_2226910_090922_exp_fmj.jpg.CROP.original-originalYour Assignment:

This will give you great insight into your market. Don’t skimp on this. You would be missing out on a great education.

  1. 1)  Locate 3 properties that have investment potential in your area. The properties should come from multiple sources (Realtors, investors, online sources like craigslist) and can include REOs, accepted short sales, and auction properties, etc.
  2. 2)  Determine the sales price of each property and the terms of the sale.
  3. 3)  Look up each property using zillow and the other resources listed above. Look at the zestimate value. Then look at 6-8 comps (sold within 90 days) for each property. Take notice of the highs and lows.
  4. 4)  Go visit each property (get inside if possible) and one respective comp for each property.
  5. 5)  Determine if the property would best fit into a:
    a. WHOLESALE MODEL: can it be easily flipped to another investor for between 2 and 5K?b. RETAIL MODEL: Is it financeable? Will it meet FHA standards? Does it meet the 70% ratio described earlier?c. “BUY AND HOLD” MODEL: Does it yield a high enough cap rate?

It’s possible the property fits into none of these models. Use the tools outlined above to arrive at your conclusion.

  1. 6)  Go back to the source of the property and ask them to sell you on the deal. Ask why it’s a good investment in their opinion. See how their information matches up with yours.
  2. 7)  Repeat this process every time you need to evaluate a property. Eventually, you will be able skip the visit unless you are making an offer.

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Real Estate Investor, and friend to the Real Estate Freedom community, Rob Swanson just released a training video that goes through a probate investing scenario, step-by-step.

In this video you’ll learn:

Learn how to get probate leads that no one knows about by getting the houses released from the probate early — the families will love you. SEE THE FULL TRAINING VIDEO HERE!

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This new video by Matt Andrews reveals why most Investors are dead before they complete their first flip and how you can insure that you are one of the 2.6% who profit on EVERY DEAL. The Secret is… SEE THE VIDEO HERE

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