You'd probably be surprised to know that even these days of instant communication and the ability for properties to be advertised on the internet to audiences of millions of people, there still exists lots of hot real estate deals on the market.
Let me share with you the ways that I personally and many experts I know, have profited greatly by finding hot real estate deals. By hot I mean real estate that is being sold well under market value.
Its all about the 6 D's:
1. Divorce
2. Death
3. Dummies
4. Developers
5. Deadlines
6. DBank
and together these 6 Ds fall under the 1 D class - DESPERATE! Desperate vendors need to offload their real estate quickly so they will sell their real estate for well under market value.
Desperate Vendor #1 - Divorced
Its a sad fact that many people are getting divorced these days, and through divorces, most couples will need to sell their real estate in order to split the assets between the divorcing couple. Most people who are divorcing want to sell their property quickly, and so will normally sell below market value in order for them to get a quick sale.
Desperate Vendor #2 - Death
When people pass away, they often leave their properties to a group of people - like their children. When this happens, many groups will want to sell the property as this is the easiest way to divide the asset up. Most groups will want to sell their real estate quickly and will settle for under market value.
Desperate Vendor #3 - Dummies
Im still astounded by the fact that there are still many people out there that do not know what their real estate is worth when they sell. Many vendors dont see the potential in their property and so ask for less because they think their property doesnt look as good as the others in the street or that it needs a lot of work. If you understand the ways to add value to a property for not a lot of money, you can see properties with a different perspective. Because you are a savvy investor and understand the market in the area, you know that the property is worth more. So its possible to pick up a property sold by a dummy for below market value.
Desperate Vendor #4 - Developers
Now this vendor category might surprise you as you may be thinking, why would a developer be desperate to sell and why would they sell under market value. Well there are many different kinds of developers out there and not all of them are as experienced as the next. Some developers dont know how to budget in all the required costs of developing a property. Other developers might not be able to get the best kind of finance and so their banks are starting to push them for repayments which they cant afford unless they sell some of the units within a property. Some developers just need to get some sales down so that they can advertise that a certain percentage of their development has been sold. All these cases spell a desperate vendor who needs to sell a property quickly and you benefit by purchasing it under market value.
Desperate Vendor #5 - Deadlines
These are vendors that need to sell because of an impending deadline. It might be that the vendor is moving overseas because of a job they have accepted, or that the vendor has already committed to purchase another property and they need to sell their existing one to finance the new purchase. In these cases, you will find a desperate vendor who is generally quite flexible on their selling price and thus you can pick up a hot deal under market value.
Desperate Vendor #6 - D'Bank
D'Bank (the bank) becomes a desperate vendor when a mortgagee defaults on their mortgage payment and the bank forecloses on the mortgagee. In order to recoup some of their money back on the loan and to save on the cost of maintaining a property, the bank puts up the property for auction. In the majority of cases, these properties are sold well below market value. This is known as seized property or foreclosures. Its well known that you can purchase foreclosed or seized properties for up to 90% off market value.
How to Find Desperate Vendors And Hot Real Estate Deals
The big question is, how do you find these desperate vendors and thus score these hot deals. Here are some ways:
1. Scour all the places that list real estate properties for sale. Look for words in their ads like urgent, desperate, heavily reduced, well below valuation, vendor moving overseas, vendor has already bought, vendor looking for quick sale, deceased estate. Chances are these are desperate vendors who will be willing to be quite flexible on their price.
2. Keep up with the ads in an area that you are focusing on if you notice properties that have been listed for a few months, then you should be able to find a vendor who is tired and a bit more open to your offers.
3. Make good friends with real estate agents and let them know that you are a professional property investor. The agents often know about deals before they are advertised and if they know you are ready to pounce on a good deal, they will want to beat other agents;
4. Work with real estate agents that are investors themselves and keep in touch with them. If they know that you are serious and will act quickly they will keep you informed about any good deals that are coming;
5. You can drive by properties that look a bit run down and not well taken care of. Either knock on the door or use council records to locate the owner. Give them a call and make an offer. Youll be surprised at how many vendors would be open to a serious authentic offer by a willing buyer.
6. Subscribe to the many real estate listing sites on the internet. Most of them allow you to customise what you are looking for - search on keywords like urgent, desperate, vendor has already bought, deceased estate & have all of these emailed to you regularly;
7. Subscribe to foreclosed and seized property listing services that can send you the latest foreclosed property and when the auction will take place.
All in all, you should follow the famous property investing tycoon, Dolf De Roos 100:10:3:1 Rule:
* Look at 100
* Put offers in on 10
* Have 3 accepted
* Buy 1
Be persistent in your hunting of hot real estate deals, as persistences always pays.
For more information, resources, tips, advice and help on how to generate excellent profits from Real Estate investments, visit Profit From Real Estate |
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