WHEN YOU FIND A WINNER – ACT QUICKLY
The first thing to do is not panic! My kind of properties are almost always available –You simply haven’t discovered them yet. Finding the right properties, meaning the kind that will produce monthly cash flow and long-term profits, is one of the most important skills you must develop to enjoy any success in this business! Remember, if this was, too easy – everybody would be doing it and they’d all be rich! Finding properties that will earn respectable profits is one of the biggest challenges for every investor regardless of how many properties might be for sale in his buying area.
You must always keep in mind – finding profitable deals is our goal — Not finding lots of deals! Pattern your buying methods after that old Hills Brothers coffee TV commercial a few years back. “90% of all the world’s coffee beans are rejected by Hills buyers –They’re sold to the other guys.” The truth is, about that same percentage should apply to buying the right kind of real estate unless you’re only doing this stuff as a hobby. Quality deals are the ones that make money. Do not substitute profits for volume. It makes very little sense to hurry up and buy a loser!
LOOKING WHERE THE CROWD DON’T GO
People constantly ask me how do you find these kind of properties? “Diamonds in the Rough”, some call them! The most common alibi I hear is — There’s no properties in my home town like you write about! With very few exceptions, I must disagree. The properties are there! You simply haven’t found them yet. There are some reasons why you haven’t; however, I’ve found most folks haven’t been looking for them. Most investors I know about do the traditional kind of searching for properties. If they wish to be apartment owners, they tend to look at traditional apartment buildings. Single house people generally drive thru the “Burbs” in search of prey. Hardly anyone is screwy enough to buy slaughterhouses or an old motor lodge. My suggestion is to broaden your vision a bit. After all, “non-traditional properties” are lots more fun – as well as more profitable.
If you’re dead-bang serious about real estate investing like I am – then you should always make it a daily habit to read (check out) the classified ads in your local newspaper where you buy properties. My best-classified purchase was eleven fixer houses on Haywood Avenue. The property was listed under “Income Property For Sale”. I’ve written about my Haywood houses in my best-selling book, INVESTING IN FIXER-UPPERS; however in case you missed the details, let me simply say, Haywood made me $150,000 profit and $1000 monthly income for only one full summer’s worth of work and clean-up.
QUICK ACTION EARNED ME THE MONEY
Many investors do not adequately prepare themselves for a quick response. Simply stated, they don’t realize when they’re standing directly on top of a gold mine. At Haywood I was more than ready. Indeed, it was a gold mine – and I knew it the minute I saw it! Needless ~o say, I’m like most every other buyer. I’m aware that sellers will likely pad their advertised selling prices knowing full well that during negotiations they’ll take a little bit less. But here’s the deal folks — When you’ve done your homework and you already know what price you can pay based on the profits you expect to earn if your offer gets approved, then why play games with the seller and gamble on losing the deal! Your main goal should not be to save a few dollars on the purchase price or attempt to alter reasonable terms, but rather your main concern should be — Will this property be a winner for me based on the offer I’m submitting to purchase it?
It’s important when you make a full price offer like I did on Haywood to limit the seller’s time to accept. You don’t -want your offer “shopped around” or in competition with other buyers. One or two days is generally enough time with fax machines available everywhere. Full price offers always make agents and their selling clients extremely nervous! Both feel that the price they set was too cheap. That’s an important reason to make them sign your offer quickly. Don’t give them any extra time to think!
The thing I remember most about my Haywood property is how quickly I responded to the classified ad. I called the listing real estate agent at home on a weekend. The ad ran Saturday morning and I handed him my written offer on Sunday.
Let me emphasize the speed of this deal. This is a very important part! When I called the agent at home, he told me the property address. I drove out to see it immediately. I already knew the general location was good and after a quick look at the houses, I raced back to my desk and scribbled out my offer. The classified ad was written up quite explicitly regarding the owner’s terms for selling. He specified the price, a modest down payment and that he was willing to carry back financing for 15 years at reasonable interest. Everything I wanted was spelled out in the ad. Needless to say, I was more than “hot to trot”.
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