After you’ve done the groundwork to prepare to begin investing, how do you actually go about finding your first investment property? You have some money saved up and means for financing, and your credit is in great condition. You’ve been building relationships and doing your research, however you’re learning that there is not one proven source to find and acquire a property. Below is a list of the various places you may want to consider searching as you are on the journey to securing your first Real Estate Investment
The Multiple Listing Service, or the MLS, is the database that Real Estate agents and brokers use to help their clients search for properties. When a property is considered to be “on the market,” it means that it is listed on the MLS. You can also make your search very targeted and gather the most reliable comparable properties with access to this database. There is a myth that “deals” are unable to be found on the MLS. This isn’t entirely true, as I see it occur all the time, however the market conditions (whether it is a buyer’s or seller’s market) plays a part in this, and most properties you find will be at market value. If you’re looking to get a list of properties from the MLS your best bet is to contact a trusted agent or broker
Wholesalers are Real Estate Professionals who identify sellers that are highly motivated to sell a property in a short period of time and are willing to sell it for under market value. The wholesaler then comes up with an arrangement to have the seller’s property assigned to him or her, but instead of actually purchasing the property outright, assigns it to a buyer that he or she has also identified. Wholesalers are known for having a list of buyers who are constantly on the lookout for investments properties to purchase and fix up. As someone looking to purchase a property, it would be beneficial to get on the buyer’s lists of wholesalers who assign properties in your areas of interest.
Online Database Companies
These are sites such as Zillow, Redfin and Trulia where the day to day consumer can search for properties. These databases are able to pull modified information from the MLS among other online channels, and they also have their own listings. The upside to using one of the online database sites is how quickly you can retrieve information and it’s something you can do without an agent. What seems to work for many consumers is to look up a property of interest on one of these sites and then send it to their agent to get more information, including comparable properties and a more detailed run-down
This is one of the most popular ways of finding a property. Sheriff sales are monthly auction sales that are held by the city’s sheriff office and there are two types: the mortgage foreclosure sale and the tax lien sale. Prices are typically higher with the foreclosure sales, however you can potentially find properties below market value in either of these types of auction sales. You go there and bid on a property, place a down payment of just $600 and have up to 30 days to close. The sheriff sales have become very popular in recent years so it is a more challenging source of finding properties now, however if you have the time and patience it is a solid option. Keep in mind that there are caveats to the sheriff sales. For instance, even though prices tend to be lower with the tax lien sales, properties have a 9 month right of redemption on them, whereby the previous owner can reclaim their property if they pay off their back taxes within 9 months. This doesn’t come into play with the foreclosure sale, however this is just to say that you need to do your research or maybe attend with someone who has experience in this area
The sheriff sales are a type of auction sale, however there are other auction sales that also occur. In Philadelphia for instance, Philadelphia Housing Authority (PHA) every few years auctions off properties that they deem to be structurally sound but are distressed and need fixing up. There are also online auction sites such as Hubzu.com that periodically hold auctions where you can bid on properties. Look out for the different auction sales, as they may be an opportunity to snatch something up
As we all know, Craiglist is a site that you can find nearly anything on. Properties are a part of this equation. You’ll find that many wholesalers post their deals on Craiglist, or maybe even owners who are looking to sell their homes directly.
For Sale By Owners (FSBO) are properties that are being sold directly by an owner. These are individuals who have decided not to employ a listing agent to sell their property. When buying a FSBO property you have a chance at purchasing at a favorable price, as the seller may not have the different outlets available to market his property or may be uninformed on pricing it correctly. This is not always the case, but often times a FSBO property gets listed by an agent after the owner is unable to sell it on his own.
There are Development Groups and investment companies all around that have their own properties that they list or sell. In a lot of cases these are renovated properties or new construction. If you’ve decided that you don’t want to worry about maintenance and would like to purchase a property solely as a way to generate rental income, a multi-family property of this type could be a great option for you