Tips for Newbies Investing in Real Estate
Learn how to find & buy properties in Detroit, and make money through real estate investing.
Investing in real estate is a tough gig to get in on, especially when you have no idea where to start. Here are a few of the tactics that our owners have used to find their first — or latest — deals in real estate
Have you ever had an experience where you were driving and you spot a house that was worn out — or maybe just in need of repairs? These houses are potential investments — you just have to make sure that the neighborhood is ripe for investing. Or, more accurately, you just have to find neighborhoods that are ripe for investing and then go drive around them and look for houses that look like no one is properly caring for them.
Don’t forget to take pictures of those potential houses that you have spotted and write down their address and other notes about them. If you’re looking at several houses, it’s easy to get them mixed up, so this will help you stay organized.
This tactic is the cheapest and yet one of the most effective in spotting potential house deals. You can use various online tools to find out who most of the owners are and contact them via phone, or if you’re lucky you may even run into them while scoping out the house!
Your number one goal when you speak to the owner is finding out why they’ve neglected their house and gauge how close they are to wanting to just be done with it and sell it. Are they experiencing financial difficulties? Are they incapable of doing the work themselves? Build rapport to get answers! Then show them how easy you can make the sale of their house and lock it up with a purchase contract – which you should always carry blank copies of. Veteran investors are great at meeting people and finding homeowners motivated to sell.
The downside? It takes a significant time investment.
Build your Real Estate Investing Network
Everyone who spends time trying to be ‘a real estate investor’ will to build a network. If you do it deliberately, you can build a network that will bring you great deals! A word from the wise: it will take time to build this, so you’ll have to be patient. Join online groups, local real estate investment groups, Meetup groups, and other legitimate organizations (NOT some guru’s ‘pay to listen to me talk at you’ workshops, those are pure traps), and contribute. The more you participate, the faster your network will form.
Seek Out Wholesalers
While you’re building that network, ask around about who the wholesalers are. These guys specialize in finding motivated sellers. Then they mark up the price and peddle the houses to investors. This is kind of the opposite of the ‘Just Crusin’ tactic in that you’re going to pay a bit more for a house, but you’re not going to have to invest as much time.
Foreclosure & Tax Auctions
These can be a reliable way to find potential deals on houses. The only problem is that not all the houses are deals and you must pay cash. You must also learn the legal aspects of acquiring houses through these auctions. Auctions are a fast way to find potential deals, but require lots of money.
Check with your local county office for more information on both types of auctions or tap into that real estate investing network you’re building.
Nowadays people are 80% online, especially people who are wheeling and dealing — so why not use the Internet? Craigslist free to post and browse, and it’s a great resource for finding real estate deals.
- Search for Sellers: the easiest way to search for real estate postings in your area.
- Create/Post an Ad: why wait instead post an ad that you are looking for a house to buy.
- Search for Landlords: 95% of landlords have put up their own direct phone so it’s a great way to call them up!
Keep in mind, these are not advanced tactics or ‘secret backdoor hacks’ (those don’t really exist, by the way) — just some ways that you can get started in real estate investing.