The most difficult part of buying rundown properties 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, at least 95 percent, place very heavy emphasis on LOOKS. Therefore, fix-up investors immediately have one major advantage buying rundown properties. 95 percent 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.
Properties where the owners will carry back the low interest financing are the kind of transactions that allow you to buy real estate with minimum cash down payments – and still be able to get cash flow. Bank financing with higher interest rates or the variable rate mortgages are not the kind you want. Bank financing will seldom be much of a problem when you buy older, rundown type properties like I recommend. The reason is original bank loans, if there were any, have long since been paid off. As far as new loans are concerned: forget it, banks don’t loan money on junky looking properties’