John Jung, Coldwell Banker King Thompson, Dublin, Ohio
   Direct Line: (614)526-5692  Home Office: (614)793-2967  Fax:(614)889-1901
Email: FreeReport@JohnJungJr.com

Where Do I Find Investment Real Estate?

It almost goes without saying that you want to buy the houses for the lowest possible price. But where do you find these deals? They certainly don’t walk up and knock on your forehead (unless you are a real estate agent). This means that you need to actively go out and look for them. You need to develop a system for locating motivated sellers.

What is a motivated seller? It is a real estate seller who, for whatever reason, is anxious and compelled to sell their house as fast as possible. These sellers will likely sell for less than market value, often considerably so. They will sell below market, and shake your hand and thank you for buying it.

They had a problem, and you helped solve it. You got the “monkey off of their back.” Do not ever feel like you are taking advantage of a real estate seller. For whatever reason, they are in the situation that they are in and it’s not your fault. Remember, if you don’t buy it, someone else will!

What would cause a seller to be in a situation where they need to sell fast?  There are many possible answers, but here are some of the most common:

1. DIVORCE - About a significant percentage of all real estate home sales are the result of divorce or family problems. While this is unfortunate, it provides some great opportunities for the investor. There are cases where one spouse will agree to sell the house very cheap just so that the other will get less proceeds. Often in messy divorces the court will order the sale of the house, so it MUST be sold. When people are highly emotional, they will do things that are sometimes hard to believe, like accepting a low offer on the house!

2. DEATH - This is also unfortunate, but it is something that happens eventually to all of us. Sometimes the real estate sale is motivated by emotion, like where a spouse does not want to stay in the same house after the other spouse dies. Other times it is more financial, where the home can no longer be afforded without the deceased.

In many cases, there are large estate taxes to be paid. If the inheritors of the estate do not have the cash to pay the taxes, they will sell off assets like houses to pay the taxes. If they don’t, the government will step in and force an estate sale to generate the money owed for the taxes.

3. JOB TRANSFER - When a person is dependent on their job and they get transferred, they sometimes must move quickly. Often one spouse will move on to the new city and leave the other behind until the home sells. This means separation and the expense of traveling back and forth. After several months of this arrangement, the motivation to sell can increase greatly. Sometimes the transferred employee’s company will pay some or all of the costs associated with selling the house and moving. This may enable them to take an even lower price for the house.

4. BOUGHT ANOTHER HOME - In many cases a seller will purchase another home before their existing home is sold. They may need to sell the existing home before they can close on the new one. Sometimes they may close on the new one, move into it, and leave the old one vacant.  Either way, the motivation to sell can be large!

5. FORECLOSURE - When the owner of a home doesn’t make the payments, sooner or later the bank will foreclose on the property and take it back. Depending on state/local laws, the foreclosure process can take anywhere from 4 to 15 months. This leads to 2 different opportunities.

The first is where the foreclosure process has been started, and the owner is still living in the property. They may be highly motivated to sell because soon the bank will complete the foreclosure and they will be forced to move out… with a foreclosure on their record if they don’t sell it first. The other is where the bank has completed the foreclosure and now owns the house. It is controlled by the bank’s real estate owned (REO) department. The REO department does not want to own houses, and will attempt to dispose of them as soon as possible, often at substantial discounts.

6. VACANT HOUSES - Any of the above 5 situations can lead to a vacant house. Any time you see a house tha t is sitting vacant, you see resources being wasted. Whoever owns that piece of real estate is either making payments on it every month or, if they own it free and clear, missing out on the use of the money somewhere else. No matter what the situation, a vacant house is usually a good sign of a motivated seller.

There are several ways to find these motivated sellers. The first is to find a reliable, professional real estate agent to assist you. Real estate agents are out in the trenches every day and are the first to know about these types of properties. Most of the time the agents are paid by the seller, so it doesn’t directly cost you to use their services. Look in the newspapers or drive the neighborhoods looking for the 'for sale by owners'. The last two are time consuming, but you can do it. Good luck on your search. If you would like me to help you, give me a call.

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John Jung, Coldwell Banker King Thompson, Dublin, Ohio
   Direct Line: (614) 526-5692  Home Office: (614) 793-2967  Fax:(614) 889-1901
Email: investinfo@JohnJungJr.com