The most difficult part of buying the best property has nothing to do with contracts, paperwork, escrow instructions and presenting offers. It’s finding sellers who really and truly desire to sell their properties. You’re looking for sellers who have compelling reasons to sell. Sometimes the fear of losing their property in foreclosure creates pressure. That’s an obvious reason. Many other reasons are hidden and not so visible however. Always remember this – A real need situation must exist for the seller, or you will have great difficulty meeting your purchase objectives. That is buying the property with the kind of terms you need to make the transaction a profitable one for you.
Most buyers place very heavy emphasis on LOOKS. Therefore, fix-up investors immediately have one major advantage buying rundown properties. 95% of the potential buyers won’t show up – that’s much less competition! Knowing what to buy and how to go about buying correctly makes the difference between profit makers and negative deals. Underline, knowing how to buy correctly. Then circle the sentence and read it again.
With rundown properties, often a simple cleanup and painting, together with a change of tenants, will get you higher cash flow almost immediately. With increased income from rents, you now have a more valuable property. Several of these deals can “pump up” your equities quickly and allow you to build wealth much more rapidly than otherwise. I call this “fast track investing”. Properties where the owners will carry back the financing are the kind of transactions that allow you to be create and design payments that will give you immediate cash flow.