The US housing market 2018 is a seller’s market. It has been for some time and will be for the foreseeable future. You have two options: wait for the tides to change and sweep in a buyer’s market OR you can learn how to find the best real estate investments in a seller’s market.
The real estate investing choice is yours.
However, real estate market forecasts predict a buyer’s market is far off. Why continue to miss out on making money in real estate just because most housing markets are seller’s markets? Instead, let us arm you with actionable ways to find the best real estate investments in a seller’s market.
Be Worthy of the Competition in a Seller’s Market
There is competition and every real estate investor is looking for ways to stand out in a seller’s market. You may find the best real estate investments in the current housing market with ease. If the seller, however, has no interest in a real estate transaction with you, then your investment property search will be so much longer than you initially intended.
The way to trump the competition in a seller’s market? Well, there are three ways:
You may already have this real estate investing tip under your cap, but it’s an important one. Get pre-approved for a rental property mortgage, if that’s the route of investment property financing you’re taking. A letter of pre-approval makes you attractive to sellers as they know you’re backing up any offer you put forth.
Of course, a full cash investment makes you an even more attractive real estate investor in a seller’s market. It gives you your pick of the best real estate investments. If a real estate investor does intend to pay in cash, getting the cash ready should be done before the investment property search begins.
Form a Real Estate Investing Team
Your real estate investing team? It’ll probably only have two members: you and a real estate agent. Alternatively, real estate investors choose to team up with real estate investing tools. Either way, you need some support to find the best real estate investments in a seller’s market. You need a competitive edge and a well-chosen real estate investing team can give you that.
Here are a few of the best resources for forming a real estate investing team that will make a difference in a seller’s market:
To learn about our real estate investing tools, click here.
Choose a Few Real Estate Markets
Have your heart set on one real estate market in 2018? Then your investment property search might keep going until an actual buyer’s market does show up. Rather, set your real estate investing eyes on a few good real estate markets this year. If you find the competition too heavy in one real estate market, you’ll move onto the next carefully chosen one quickly. All the while, other real estate investors are lost on where to go next.
While the buyer’s market among them may be rare, not every seller’s market is exactly the same. There are real estate markets where, when buying an investment property, you have more negotiating power than in others. How can a real estate investor find these kinds of seller’s markets? Simple. First, you compile a list of real estate markets, all with a promising return on investment. We’ve already done this for you. Click here to see it. Alternatively, check out metrics like cash on cash return and cap rate for different real estate markets.
To check out return on investment metrics for different real estate markets, turn to Mashvisor. To learn more about how we will help you make faster and smarter real estate investment decisions, click here.
Next, compare data like days on market, median sales price and median listing price. In some real estate markets, days on market might be greater than others. This means the sellers of investment properties here may be more willing to negotiate to get rid of the properties. Or perhaps, you can find a real estate market where the median listing price is actually much higher than the median sales price. This shows that real estate investors buying an investment property there were able to negotiate down the asking price.
This kind of real estate investing data can be found on different online platforms like Mashvisor or Zillow. Compile a list of a few real estate markets and you should be able to find the best real estate investments in any one of them.
The Best Real Estate Investments in a Seller’s Market
Some of the best real estate investments in a seller’s market are not your traditional investment properties. They aren’t listed on MLS along with the rest of the investment properties real estate investors are gunning for. Instead, you’ll have to be a more creative real estate investor to find the best real estate investments in a seller’s market.
While they come with their own set of pros and cons, foreclosed homes can be the best real estate investments in a seller’s market. These investment properties do have some competition surrounding them, whether it’s a seller’s market or a buyer’s market. It’s because these real estate investments can be bought for below market value. Still, in a heated seller’s market, it’s likely the competition for foreclosed homes is less than that for traditional investment properties for sale in the real estate market.
Just be aware of what you’re getting into with foreclosed homes. A real estate investor will need cash on hand and a nice secure budget for repairs and renovation. Make sure the foreclosed homes fall in the real estate markets on your list for those with a great return on investment. A home inspection is, of course, an absolute must with these investment properties. This will ensure successful real estate investing after repairs are complete.
An element that works independently of a seller’s market is the motivated seller. A motivated seller is someone who needs to unload an investment property. They aren’t looking to cash in on the fact that it’s a seller’s market. With motivated sellers, a real estate investor can usually find the best real estate investments for great deals.
One way to find motivated sellers is to look at pre-foreclosure listings and contact the owner of the investment property directly. A real estate agent may also be a great resource for finding the best real estate investments in this way.
Off Market Properties
Off market properties can make for the best real estate investments in any state of the housing market, seller’s market or buyer’s market. It’s because, just like with motivated sellers, the owners of off market properties aren’t looking to take advantage of what a seller’s market has to offer.
Because an off market property is one not found on MLS or publicly advertised at all, a real estate investor will have to use other resources. A real estate agent may have a list of off market properties that haven’t been advertised just yet. There are also online resources dedicated to bringing real estate investors together with off market properties. Do your research and you might just find the best real estate investments in off market properties.
The Secret to Finding the Best Real Estate Investments in a Seller’s Market
If the previous three types of investment properties aren’t for you and you’d rather go for traditionally listed investment properties, you can still find the best real estate investments. The secret here is time. You need to find investment properties as quickly as possible, before other real estate investors. These investment properties need to be the best real estate investments as well. That means any old investment property for sale in the neighborhood won’t do.
What you need in a seller’s market is a rental property calculator. Why? Because with this real estate investing tool, you can find multiple investment properties with the best return on investment in a real estate market in a few seconds. Your investment property search will take as long as it takes you to type in a few details about what you want and what kind of financing you’re using.
This is possible, and only possible, with Mashvisor’s rental property calculator which has the property finder feature. This feature allows you to find the absolute best performing investment properties in the market of your choice. You can move quickly while other real estate investors are manually performing comparative market analysis and investment property analysis.
There’s no time to waste in a seller’s market. To start your 14-day free trial with Mashvisor and subscribe to our services with a 20% discount after, click here.
Found the Best Real Estate Investments? Start Negotiating
Now that you have all the ways to find the best real estate investments, you need to know what to do next. Remember, you have to be worthy of the competition in a seller’s market. Even if you move quickly with Mashvisor’s rental property calculator, you’re likely to find a few other real estate investors making offers.
To ensure your offer gets accepted, keep the following negotiation tips in mind:
- Don’t lowball. In fact, offer a little more. If you’ve used a rental property calculator, you know what kind of purchase price will bring you a good return on investment with that rental property.
- Don’t ask for repairs to be done by the seller. It’s likely other real estate investors are willing to take the best real estate investments “as is” and you should too.
- Don’t try to get the seller to pay closing costs for you, which you can only really do in a buyer’s market or with a motivated seller.
Remember, these tips only apply if you are sure you have found the best real estate investments in a seller’s market. And, if you have followed our tips, then it’s likely that you have! Don’t be intimidated by a seller’s market. Make a move, a smart move in the US housing market 2018 and start making money in real estate rather than waiting for the tides to change.