Knowing how to find investment properties is crucial in real estate investing. A successful investment starts with finding the right property.
Table of Contents
- How to Find Real Estate Investment Properties: 6 Ways
- 5 Characteristics of a Good Investment Property
- Mashvisor vs Zillow: Which Is Better?
- Start Finding Good Investment Properties
When it comes to investing in real estate, one of the important steps every investor must take is to find the right investment property. However, it’s not always easy to find or search for investment properties, especially for beginner real estate investors. While there are several resources available, not all of them are helpful in finding a cheap yet profitable income property.
The good news is that there are a number of tested ways to find the right investment properties. If you’re new to real estate investing and wondering how to find investment properties, this guide can help you. We will explore simple yet efficient ways you can use when searching for and finding investment properties for sale.
In this article, you will learn that:
- There are different ways to find investment properties for sale.
- You can try driving for dollars to find properties that are not yet marketed for sale.
- MLS listings are an excellent place to find properties for sale. However, MLS databases are only available to brokers and agents. To access MLS, you’ll need to work with an agent.
- MLS databases are not the only reliable source of properties. Real estate platforms such as Zillow and Mashvisor make a good alternative to MLS.
- Mashvisor provides the necessary investment tools that Zillow lacks.
- To find profitable properties, you should be familiar with the characteristics of a good investment property.
How to Find Real Estate Investment Properties: 6 Ways
While finding an investment property is an important step in real estate investing, it is not the first one you should make. Before you try to find an investment property, you need to decide where to invest first. Deciding on a location for your real estate investment is crucial, and you should perform thorough research first to ensure that you’re investing in the right market.
If you’re not sure how to get started when deciding on a location, there are several things that you need to consider. Such important factors can help ensure that your investment will be a success. For instance, you need to find a location with a strong economic condition and a growing population. These ensure that people will want to stay and live in that place.
In addition, check how strong the demand for housing is and whether residents are looking to buy a home or rent one. It can help you decide on the best real estate strategy for your investment. If you prefer to invest in Airbnb rentals, it’s essential to know how well the tourism industry is doing. You should only invest in a location that’s frequented by visitors.
After you’ve made a decision on where to invest, it’s time to look for a property. However, before we go through the different strategies on how to find investment properties for sale, you should understand that the best method may vary from person to person. If you’re a new investor, it’s best to explore these different methods to see which one will suit you best.
Here are the six efficient methods on how to find investment properties for sale:
1. Spread the Word
One of the simplest methods related to how to find investment properties is through word of mouth. After all, many homeowners will tell the people within their network first if they are planning to sell their properties. Do you want to be one of the first people to know about available investment properties that are not yet listed for sale?
Talk to everyone in your social circle, including your friends, relatives, colleagues, and neighbors. Tell them that you are looking for real estate investment properties to buy. Make sure to be clear about what type of investment properties you are looking for (single-family home or multifamily) and which area you are interested in.
Maybe they know someone who is selling a home or have seen a house for sale in their neighborhood. Or, once they find a potential seller, they can recommend you since they know that you are planning to buy. Sometimes, someone in your network might even be interested in selling their own property but is still planning to list it on the market—you never know until you ask.
How to Use the Word-of-Mouth Method
Below is a step-by-step guide on how to use the word-of-mouth method in finding cheap properties for sale that can make a good investment:
Step 1: Tell your family, relatives, friends, co-workers, neighbors, bankers, and even your hairstylist or barber that you are looking for a property for sale. Ask them for recommendations if they know people who are selling their properties.
Step 2: Make sure to follow up with them from time to time to let them know that you are serious about buying.
Step 3: This step is optional, but you could offer a small incentive to anyone who can recommend a good deal. You can give the incentive after you close the deal.
Pros and Cons of the Word-of-Mouth Method
Using the word-of-mouth method can be effective if you keep a large network. If you don’t know how to find homes for sale, asking the people you already know is a good start. However, such a strategy may not work for everyone. Below are the pros and cons of the word-of-mouth method:
- Relatively easy: Talking to your circle about your plans can be relatively easy because it’s just like discussing everyday things with your friends.
- You’ll find properties that are not yet listed: If you’re lucky and someone within your network is selling a property, then you’ll be one of the first to know. Also, if you end up knowing the seller, you might be able to buy the property at a cheap price.
- Time-consuming: It can be time-consuming, especially if your network cannot make any good recommendations right away.
- Not ideal for people with a small network: If your network is small, it might be difficult to get efficient results from your search.
2. Look for Ads in Newspapers
Another classic way to find real estate investment properties is through newspapers. Look in the classified section of your local newspaper under “Homes For Sale” or “Properties For Sale.” You will find ads for all kinds of real estate properties for sale, usually categorized into houses (single-family or multifamily), apartments, and condos.
Most of the time, you can find properties that are posted for sale by owner, but you can also find property listings by real estate agents. Checking ads in real estate publications is also a good idea, although they typically come out weekly or monthly.
How to Look for Properties for Sale From Newspaper Ads
If you’re a new real estate investor and are not familiar with how to find investment properties for sale using a newspaper, you can follow this simple guide:
Step 1: Find a popular newspaper in the location where you prefer to invest.
Step 2: Look for the “homes for sale” or “properties for sale” section to find a property that would make a good investment. Find one that meets your criteria, whether you’re looking for a multifamily home or a single-unit house.
Step 3: Take note of the contact person (either the homeowner or the agent) and other details. Reach out to the contact person as soon as possible.
Pros and Cons of Using Newspapers to Find Investment Properties
Most homebuyers search online (through websites like Zillow) to find properties for sale. Only nearly 25% of buyers still use newspapers to search for investment properties. Here are the pros and cons of using the newspaper method:
- Less competition: As mentioned, only around 25% of homebuyers still use newspapers when finding real estate properties. It means less competition for you.
- More possibility to buy directly from the homeowner: Most people who post properties for sale in newspapers are direct homeowners. You can negotiate directly with homeowners and may end up paying a cheap price than dealing with an agent.
- Only a few sellers advertise in newspapers: Because most things now are done digitally, even properties for sale are being advertised online. It means newspaper listings don’t include all the available properties for sale. Most homes for sale, including multifamily and apartment buildings, are advertised online.
- It might take time: Homes for sale in newspaper ads only come on a weekly or monthly basis. It means finding a good investment property that will suit your preferences might take some time if you only rely on the newspaper method.
3. Drive Around Your Target Area
You can also find real estate investment properties for sale by simply searching for homes with a “For Sale” sign. For some real estate investors who are not sure how to get started with their search for income properties for sale, driving around can be a good idea. It allows them to find potential homes, may it be single-unit or multifamily homes, to buy within the area that they want.
You can also try “driving for dollars.” It means searching for properties that are not currently for sale or at least not being marketed visually. However, such properties may have owners who might be willing to sell. In this case, you need to keep an eye out for properties that look vacant, run-down, or that suggest that they have an absentee owner.
How to Find Properties for Sale By Driving Around the Area
If you don’t know how to find houses for sale by simply driving around, you can follow the guide below:
Step 1: Get in your car, drive around the neighborhood you’re interested in investing in, and look for both realtor “For Sale” signs and “For Sale By Owner” signs.
Step 2: If you have a preferred property type, drive around a neighborhood that consists of that particular property type. For example, if you only want to buy a multifamily home, make sure to drive around the area where multifamily homes are usually located.
Step 3: Copy down the names, phone numbers, and other contact information that appear on the signs.
Step 4: Get in touch with the homeowners or real estate agents as soon as possible to make a deal.
Pros and Cons of Driving Around to Find Homes for Sale
While you can drive around the area to find a property for sale, such a method may not always be as effective and efficient for all real estate investors. It’s important to know how to use it efficiently so you won’t waste your time and money on fuel. Here are the advantages and disadvantages of using the above method:
- Possible to find properties in your preferred area: If you’re lucky, you may be able to find a home for sale in the specific area of your choice. You can also find the specific property type of your choice, either an apartment building or a multifamily home.
- Possible to find a home that owners might be willing to sell: When driving for dollars, you may be able to find or meet a homeowner that may be willing to sell their property.
- No guarantee to find properties for sale: By just driving around a particular neighborhood, there’s no guarantee that you will be able to find even one property for sale.
- You need to spend money on fuel: If you plan to do this in several locations, then you need to spend a certain amount of money on gas. It may be very costly in the long run.
4. Use Real Estate Websites
Thanks to advancements in technology, finding income properties online is now easier than ever. Some real estate investors use MLS databases to find available listings. However, not all investors can get access to real estate MLS listings. Most of the time, you need to work with a real estate agent who can access the MLS to find properties from an MLS database.
Fortunately, there are plenty of other real estate investor websites available on the internet aside from MLS databases. The websites allow you to find thousands of property listings for sale. Usually, you’ll need to pay a subscription fee to access the listings. So it’s important to choose the website carefully to ensure you get the best value for your money.
How to Find Properties for Sale Using a Real Estate Website
If you don’t know how to use real estate websites to find investment properties, you can follow the following step-by-step guide:
Step 1: Search for a real estate marketplace online, such as Zillow, Trulia, or Mashvisor.
Step 2: Compare their fees and services. Choose a platform that will work best for your needs.
Step 3: You can start to find properties for sale online by searching using your preferred criteria (location, property type, whether single-family or multifamily, budget, etc.).
Pros and Cons of Using Real Estate Websites to Find Properties for Sale
While real estate websites are typically efficient when it comes to finding a cheap yet good income property, it also comes with advantages and disadvantages, such as the following:
- Quick and easy to use: With an online search, it’s quick and easy to find a property without leaving the comfort of your home.
- Plenty of options: An online MLS database and real estate platforms can provide a wide selection of properties for sale, depending on what you’re looking for. It’s easy to find different property types for sale, including single-family and multifamily homes, apartments, and condos.
- Not usually free: While some online MLS databases are free to access, you can only get the full feature if you pay for a subscription.
- Not all real estate websites are reliable: Keep in mind that not all online real estate marketplaces are reliable. Some listings are not updated, while others do not list the best properties available. It’s important to choose carefully.
What’s the Best Real Estate Platform to Find Properties for Sale?
The best real estate investment platform in 2022 is the one that can provide access not just to MLS but to other sources as well. Choose a platform that will not only allow you to find an income property but also help you decide which property will make a good investment.
Mashvisor.com is a one-stop shop that provides access to a wide range of available listings for sale. Using Mashvisor’s Rental Property Finder, you can search for and find top-performing investment properties (both traditional and Airbnb properties for sale). You can access for-sale properties in any city and neighborhood across the US to find the best match for your criteria.
What Makes Mashvisor Different?
The unique thing about Mashvisor is that it is not only a property search website but also a real estate analytics platform. It offers a number of real estate investment tools that help its users to analyze the profitability of properties they find on the site.
For example, the Investment Property Calculator allows you to estimate how much return on investment you can expect from a certain rental property. In addition, the Heatmap Analysis tool shows you neighborhood-level data so you can be sure you’re investing in a good location.
5. Network With Other Real Estate Professionals
Another effective way on how to find investment properties is through a solid real estate investment network. Networking with other people in the real estate industry can help you greatly in your search for real estate investment properties.
Experienced investors can refer you to many great opportunities that suit your needs and match your goals. Sometimes, they may even offer to sell some of their own investment properties. So, before you even start investing in real estate, you should begin to build an extensive network of investors and other real estate professionals. The bigger the network, the better.
How to Use Your Professional Network to Find Real Estate Properties
A network of real estate professionals can be very useful when you need to find real estate properties for sale. If you don’t know how to get started, here are a few steps that can help:
Step 1: Consider joining real estate investing clubs and networking events so you can make connections and form relationships with a large number of people in the industry.
Step 2: You can also join various real estate forums and groups online on platforms like Facebook and LinkedIn. You can reach out to various real estate professionals, including brokers, agents, realtors, bankers, lenders, contractors, and other investors.
Step 3: Get in touch with your network from time to time. Let them know that you are trying to find properties to buy and ask for referrals.
Step 4: Make sure to stay in touch with them even if you are no longer looking for properties. It allows you to build a good rapport with your network.
Pros and Cons of Using Real Estate Network to Find Investment Properties
A network of real estate professionals can be advantageous, especially for new real estate investors. If you are able to build a good relationship with them, they can give you tips on how to become successful in your investment. However, networking with professionals is not always easy, and it may also come with a few pros and cons, including:
- You can learn from their expertise: A good network of real estate professionals share ideas and tips with each other. They can provide tips on how to find the best income properties and how to ensure you’re buying a good investment.
- They have connections: Most seasoned real estate professionals keep certain networks of their own. If you need their help to find properties for sale, they may be able to recommend you to their connections. Also, some of them may even be able to access the local MLS database.
- It takes time to build a network: Building a good network of real estate experts doesn’t happen overnight. It takes a lot of time to find like-minded people who share the same professional values as you do. Also, it takes time to build a good rapport with the people in your circle.
- Tough competition: Since most of you are real estate investors, it’s possible that some people within the network are also trying to find properties for sale. It means that you’ll be directly dealing with the competition.
6. Hire a Real Estate Agent
Working with a real estate agent is another great way to find real estate investment properties. Real estate agents can save you time, money, and frustration. They can also provide advice and guidance if you don’t know how to get started with your real estate investment. Agents are experts in real estate investing and know exactly where to find properties for sale.
Also, real agents enjoy direct access to the MLS and other real estate resources that are not accessible to the general public. If you hire one with access to MLS, you may be able to see the available MLS listings, too. It can benefit you because MLS databases typically contain listings that are not posted in the local newspapers.
In addition, agents can use their knowledge and skills to help you find investment properties that perfectly fit your criteria and buy them at the best price possible. You can also use their services to find off market properties (including those that are not yet listed in MLS). Whether you are trying to find a single-family or multifamily home, real estate agents know where to search.
How to Find the Best Real Estate Agents
Don’t just go for any real estate agent. Make sure to hire a professional agent with sufficient investment property experience. You can follow these steps to find the best agents to work with:
Step 1: Know what to look for in an agent. For example, if you want to access the local MLS database, you should find an agent that can provide you access to MLS listings.
Step 2: Visit the website of your local group of real estate agents in your area. You can also ask around your circle of family and friends to find agents that they can recommend.
Step 3: You can reach out to different real estate professionals, not just agents. You can also work with a real estate broker or realtor. Sometimes, you can also work with bankers or lenders who are directly dealing in real estate.
Step 4: You may also check reliable real estate platforms to find the best agents. For instance, you can check out Mashvisor and get a list of licensed real estate agents in the US.
Pros and Cons of Hiring Real Estate Agents to Find Properties
Hiring a real estate agent is one of the popular and effective ways on how to find good investment properties. However, they also come with benefits and drawbacks, such as the following:
- Access to MLS: As mentioned, real estate agents can provide you access to MLS listings, which may not be available to investors who are not licensed. MLS listings contain different property types, such as single-family, multifamily, and apartments.
- They are experts in real estate investing: Agents can share their knowledge and give you tips on how to invest in real estate. It may come in handy, particularly if you’re a new real estate investor.
- Extra cost: Depending on your agreement, you may need to pay a certain fee if you choose to work with an agent.
- You need to build rapport: Since agents work with several clients, you need to build rapport with your agent to ensure that they will give you priority. Just like with networking with professionals, this may take time.
5 Characteristics of a Good Investment Property
What makes a good investment property and how to make sure you’re buying the one that will be profitable? Let’s explore the five important characteristics of good investment properties and what to look for when you’re trying to find one.
1. Good Location
We cannot stress it enough—but the location of your property can either make or break your investment. It doesn’t matter whether you buy a small apartment building or an old multifamily home. If you’re investing in the wrong location, you’re setting yourself up for disaster.
To find a good location for your investment properties, you must ensure that it offers plenty of job opportunities. Also, the economy must be strong, and the population is growing.
Keep in mind that most of the time, home prices in good locations are not cheap. However, they will not necessarily eat into your profits. It only means that you can expect your property to appreciate in value more quickly.
2. Demand for Housing
When trying to find a good location, you also need to find out how strong the demand for housing is. What is the population growth rate? Is there a high demand for rentals? What do people in that area prefer to rent, a single-family home or a multifamily unit? Do the residents prefer to buy a house rather than rent one?
You should know how to find the price-to-rent ratio in the area you’re interested in investing in. A location with a high price to rent ratio means that residents find it more affordable to rent instead of buying a home.
In contrast, a low price to rent ratio indicates that home prices are cheap enough that people find it more practical to purchase a property instead of renting one.
3. Competitive Price
One more important thing to consider when you’re trying to find a good investment property is its price. The property price is a big factor that can affect your profit. If you want to make a good return on investment, you have to find a property that is reasonably priced based on the market. That’s why it’s important to check the real estate comps when shopping for a home.
Real estate comps can help you determine that the price of the property is at par with or lower than the market value. If you don’t know how to find the comps, it’s best to use a real estate analytics platform that can provide the neighborhood comps for you, like Mashvisor. The platform can help you compare properties of similar types and features.
For instance, if you’re planning to buy a multifamily home, you should compare its price to other multifamily properties in the same area. Mashvisor will not only provide the comparable prices of different multifamily homes but also the comparable rental income, expenses, and cash on cash return. In such a way, you’ll get an idea of how much profit you can earn.
4. Fewer Repairs Needed
Since you are buying a used property, it’s normal for it to come with flaws. However, make sure that the flaws can easily be fixed and that you won’t need to spend a lot of money on repairs. If you’re not sure how to check the property’s physical condition, it’s best to work with an expert to help you assess the property.
It’s important that the property you are buying does not need major repairs. Make sure that there are no major issues with plumbing, which is one of the most difficult to maintain. For multifamily homes, make sure that the separate utility meters are working well. Also, set aside a good amount of budget for repairs to increase the value of your property.
5. Positive Cash Flows
Another important characteristic of a good investment is that it generates positive cash flows. So, you need to find a property with rental expenses that are lower than its rental income. But how to find investment properties that can generate a monthly income that is higher than what they cost? You can do so through a thorough investment property analysis.
Mashvisor can help you with this by providing a comprehensive real estate analysis that includes all the necessary data. You can also calculate the cash flow of an investment property using Mashvisor’s rental property calculator. You’ll also learn how to find the property’s cash on cash return and cap rate based on your financing option using the calculator.
Mashvisor vs Zillow: Which Is Better?
If you’re planning to use online real estate platforms to find properties for sale, two of the most popular options are Mashvisor and Zillow. But how does Mashvisor differ from Zillow, and vice versa?
Both Mashvisor and Zillow allow potential buyers and investors to find a property for sale through their database. If you don’t know how to search for a property, you can simply go to Mashvisor or Zillow websites and use custom parameters like location, budget, or property type. You can also specify the number of bedrooms and bathrooms when searching.
For example, you can look for a multifamily property by customizing the property type into “multifamily.” You can also set your budget so only those properties that meet your requirement will show in the results. However, if you’re a serious real estate investor and want to learn how to find the best income property, Mashvisor is a better option compared to Zillow.
How Is Mashvisor Different From Zillow?
With Mashvisor, you can enjoy more features and tools from a real estate platform, including real estate analytics, rental property insights, neighborhood comps, and a real estate calculator. If you’re an investor who wants to know how to compare properties so you can choose the best option, such features and tools come in handy.
Similar to Mashvisor, you can also search for available properties for sale (including single-family, multifamily, condos, and apartments) through Zillow. However, Mashvisor is best for all types of investors. In contrast, Zillow is more geared towards homebuyers and investors who don’t need in-depth rental property analysis.
Zillow does not provide rental comps, neighborhood analytics, cash on cash return analysis, and real estate calculator. On the other hand, Mashvisor provides investors with all the said tools and more. While Zillow lets you search for homes by price, rent, features, cost, and type, it lacks the property analysis tools mentioned above.
While Zillow is free, it doesn’t really provide investors with the necessary tools so they can learn how to evaluate investment properties and make the right investment decision. On the other hand, you can quickly do them through Mashvisor.
Start Finding Good Investment Properties
New investors may not yet master the techniques on how to find investment properties, but the abovementioned tips can help you get started. Whether you’re looking for a traditional rental or an Airbnb rental, there are several properties available if you know where to search. You can also try to explore in a number of ways rather than sticking to one method only.
Using several methods to help you find an investment property can help you find a better fit more quickly. For instance, you can ask your friends if they know of someone who’s selling a home, while at the same time, you can do a search online. If you limit your search to only one strategy, you basically reduce the potential options you can choose from.
Take the time to learn all the different strategies described above before you actually start your investment property search. For easier and more efficient results, you can subscribe to Mashvisor to find a profitable investment property. Whether you’re looking for an apartment building, condo, multifamily, or single-unit home, Mashvisor can help you in every step of your property search.
Mashvisor will help you analyze the property you are looking to buy and compare them with other similar properties in the area. It allows you to choose the best investment property that can generate the most profits.
If you’re buying a multifamily home, you’ll see important information about the property, such as the rental income, expected expenses, and occupancy rate. Moreover, you can use the rental property calculator to check how much cash flow you can generate based on your financing option.
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