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Buying real estate might start with a look in the newspaper classifieds, a visit to a good broker, or a search online. These are all good ways to start looking your next investment property. Of course, you're looking at the same properties as every other investor, so it's not always easy to beat the competition to a great buy.
Another way to find good real estate investments is to look at properties that aren't for sale, and make an offer. My first home was bought this way. An ad in the paper stating what I was looking for soon brought a call from an old couple that had been thinking about selling. They saved a broker's commission and I bought their place at a good price.
Buying real estate when it isn't for sale starts with a three step search process. Start by deciding what you are looking for. Single family rentals or large apartment buildings? Then look for properties that fit your criteria, and when you find them, contact the owners.
Buying Real Estate From
Owners That Aren't Selling
Don't limit yourself to "fixer-uppers" and other "problem" properties. They may more likely to have owners willing to sell, but many owners of investment real estate have thought of selling. Start with almost any building you like. You can't say beforehand if or why a landlord is ready to call it quits, and you find out by asking.
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Tact is necessary, of course. Give the owner a call, and tell him you're an investor, not a broker. Tell him you like what you see. Let him know you can have an offer ready in a week if he's interested. If he says he's not interested, thank him politely and hang up, but be sure to send him your card or a letter. Many investors have later bought from owners that changed their minds.
If there is some interest, explain that you are an investor, so your offer will have to be based on your return on investment. This means you'll need to see the books. Specifically, you'll need to see the rent roll, listing the units and what they rent for, plus current occupancy, and operating expenses for the last
Prepare a confidentiality agreement before you call. Tell the owner you'll sign it and deliver it to him before you see the books. He might not want the tenants to know he's thinking of selling, so inspecting the units may have to wait until you make an offer. Make an acceptable inspection a contingency in the offer.
Why buy investment properties in this way? There's no competition and no sales commission, which means you may get a better price. Also, instead of waiting for a great property to be listed for sale, you just find it now. Why should you wait until it's for sale before buying real estate?
Houses Under Fifty Thousand | Buying Real Estate Not For Sale