So, you have reached a point in your life where you decide to earn extra income by buying an investment property, but you are not equipped with the background knowledge needed to find a successful real estate investment opportunity. Or you are just a real estate investor looking for alternative ways to find rental properties. If so, then you are at the right place, here we will provide you with a step-by-step guide on how to find investment property and how to negotiate the best deals that meet your real estate investment objectives.
How to make profit when you buy an investment property
Before delving into the where and how to find investment property, it is important to explain how to make profit when you buy your real estate investment property. As a general rule, remember that you make profit from a real estate investment when you buy an investment property, not when you sell it. In other words, you must purchase an investment property at a price that ensures that you will make your desired profit in the future. Most importantly, don’t count on appreciation, real estate markets swing upwards and sometimes downwards. Therefore, you make your profit based on what the real estate property is worth today and not on what it might be worth in the future.
SET YOUR LIMIT
Before asking how to find investment property, always work out what you can afford. Searching for a real estate investment property can be time consuming, so for the sake of time saving, set a limit for your investment which most of the time depends on the down payment you have. A minimum down payment of 20% is usually required by banks to mortgage an investment property. Work out how much you have and set an upper limit before you look for an investment property.
How to find investment property step by step
So, you know your investment budget and your objectives. The main question now is how to find investment property.
Step 1: Drive around
This method is considered ideal for new real estate investors since it only requires time and a tank of gas. Get in your car and drive around looking for houses for sale and “FOR SALE” signs and contact property sellers to get more information. After all, there’s no better way to negotiate a good deal with a property seller than being one of the first investors to contact him/her. While driving around, you can also look for distressed or neglected properties, which is a sign that the property owners in the neighborhood are willing to sell.
Step 2: Leverage your real estate network
Networking in real estate investing is an important asset that you should use when wondering how to find investment property. The best real estate deals can be made through your existing real estate network, which includes real estate professionals such as real estate agents, professional property managers, real estate investors, contractors, and the list goes on. Real estate networking is crucial in a buyer’s market as having the right people in your network can give you early information about real estate investment opportunities even before they are listed.
Related: Creating a Real Estate Investment Network: Who Do You Need?
But what if you don’t have a real estate network? Well, you should start creating one now! This can be done in person by attending real estate networking events such as Real Estate Investor Association (REIA)-sponsored events, or simply through social media platforms like LinkedIn and Facebook. After all, it all depends on your ability to effectively communicate with the real estate professionals you meet and the efforts you put in maintaining these relationships.
Step 3: Use online databases, newspapers, and marketing websites
How to find investment property from home? The internet is full of websites of listed real estate properties for sale. Search websites like Realtor.com, Redfin.com, and Craigslist.
Multiple Listing Service, or MLS, offers a collection of real estate properties for sale by different real estate brokers across the country. Real estate listings found on different websites usually come from MLS, which offers information to the public but with limited access.
In addition to online databases and websites, look in newspapers for listed properties for sale that might match your real estate investment criteria.
Step 4: Mashvisor
How to find investment property with just a few clicks? Welcome to Mashvisor!
Mashvisor is definitely the ultimate tool available to find the best real estate investment properties. Mashvisor’s investment property analysis tool allows you to compare thousands of property listings in different states, cities, and neighborhoods. In addition, Mashvisor’s investment property calculator provides you with important real estate metrics such as cash on cash return, cap rate, occupancy rate, and estimated rental income. With Mashvisor, you can also decide whether to follow a traditional vs. Airbnb rental strategy. In other words, Mashvisor provides everything you need to buy an investment property and make it a profitable one.
Related: How Mashvisor Revolutionized Cap Rate and Investment Property Analysis
Step 5: Check foreclosure lists
How to find investment property? Foreclosure lists! When a property owner is no longer able to make his/her mortgage payments, the bank attempts to recover the balance of the loan by selling the real estate property as the collateral. Foreclosed properties are attractive to real estate investors because banks are eager to sell those properties even if at a substantial discount. To find foreclosed properties, get in touch with your local real estate agents who work directly with banks as foreclosed properties brokers.
Related: How to Buy a Foreclosure as an Investment Property
The Bottom Line
These are just a few guidelines on how to find investment property. Use the internet, your real estate network, and your local area to find potential real estate investments that are within your budget. Work out the numbers and compare them to your investment objectives.