Distressed properties, though an eye soar for many, can be a terrific opportunity and excellent investment vehicle for your money. That is, assuming you improve the home and increase its value in the process. Ofcourse, this is not always an easy task, and takes a degree of “know how” to understand how to plan, organize, and execute what many refer to as a “flip”. Some of the major parts of the process involve finding the property, finding the capital (money) to get the project underway, and finding the people to do the work. If you talk to real estate investors today, you’ll probably hear that finding the property is arguably the hardest part.
Though finding distressed properties is not an easy task to take on, there are some strategies we can deploy to find more opportunity, and today we will cover some of these. First I would say, start simple, talk to the people that have the deals. That is ofcourse, real estate agents, wholesalers, and perhaps other real estate investors. Establishing strong relationships with individuals in these areas can be massively beneficial to you finding the deal you are looking for. If that does not work, there are other more creative strategies we can try.
Sometimes finding a distressed home to remodel can be as simple as driving by one, recognizing it is in distress, and leaving a note or a letter in the owner’s mailbox. This is a subtle, respectful, and thoughtful way to get on that owner’s radar, and it is also relatively inexpensive and efficient. If this does not work, we can implement more aggressive strategies, such as sending out mass mailers to specific neighborhoods with a thoughtful letter about your intentions. You can also cold call that same list, and if you’re feeling really brazzen, you can door knock the addresses on that list.
Doing something once and giving up when it does not work doesn’t necessarily yield great results. For many of the strategies I explained above, volume is the name of the game. It means you need to make A LOT of calls and send A LOT of mailers before generating a viable lead from it. Especially when you are new to implementing these strategies, the quality may not be great simply because you have not done it before or tested your current letter. The simple solution to this is volume, volume negates quality.
When you’re new to real estate investing, especially in this day and age, you have to use everything you have to create leverage, this includes relationships, work ethic, and the reputation that you build for yourself. That being said, it is still manageable to find homes that need improving, and people need them more than ever now in the midst of a housing crisis. Stay the course and keep persistent, and let me know if I can help you, thanks for reading!