You’ll hear that the days of making money investing in real estate are gone forever, but yet there are still people that are doing quite well. The problem with most advice on making money, in general, is that it is given by people who have failed, not by those that have been successful. Why would someone that had a treasure map to a pile of gold tell anyone about it, especially a person that was looking for the same gold? One of the tried and true ways to make money is to buy homes that are called “Don’t Want ‘Ums” then either fix them to resell, or flip them quickly to other investors.
Finding Houses That Are Distressed Is Work
There are several ways to find homes that are in limbo, or aren’t wanted, and can be had for a low price. Some of the methods don’t change, but they have become easier since many records are now online, rather than at the municipality. But the first step is to find the actual houses, lots of them because this is a weeding process.
Start by filling your tank with gas and getting a notepad with paper and pen. Then, drive through blue collar neighborhoods looking for homes with disconnected electricity, water, or natural gas. Each city or water district will have different things you need to look for, you can call the utility companies and ask them if they have an online list for you to browse, that would be super easy.
With the electric company they usually put a small colored tag on the meter that shows it’s disconnected, most of the time it’s red, but call and ask them before you start looking. If the electric or water is turned off, most of the time the house is vacant, but not always. Write down all of the addresses you find, plus add a small note as to the condition, neighborhood, color, or anything else. Make particular note if there is uncollected flyers, mail, or overgrown weeds that indicate the house is empty.
Once You Have A Huge List Find The Owner Of Record
In the past, most of the records were kept at the county seat, or bureau of records, on microfiche and you had to sort through thousands of records to find the owners. Now, many counties have upgraded to searchable files on a computer, but you may have to sit in their library to view them. Sometimes you can purchase the records on disc, or even access them online, but don’t count on it in every county.
Make notes on what you find, such as the name, address and other details of the owner, bank that carries the loan, tax assessment, taxed value, and all other pertinent information that you might need to talk to the proprietor. If the owner of a record has the same address as the property, they may have moved and be in foreclosure, that’s a good sign.
Once you have lots of owners to call, start calling and asking questions. You’ll find every different type of situation that you can imagine. Some are rentals, but the owner is too old to fix them, others are still owner occupied, and they’ve lost their jobs so they can’t pay the mortgage. You’ll even find some that are for sale without sign up in the yard. Ask as many questions as you can, including how much they want for the property.
You Need To Take Your List Back Out And Reinspect
Now you have a list of homes that are for sale cheap, but with problems. You have to go back out and look at each one to see if it’s worth buying, how hard it would be to repair, or if you have any interest in it at all. Remember, though if you can find lots of properties, there are other investors that might have other skills, assets, or knowledge that might be interested in the houses you find.
You should keep a list of such investors, including their criteria so that you can earn a finders fee by showing them a house they might like to invest in. It can be enough to help finance your investments or just a side income to pay for your time and gas.
Knowing how to make money by investing in real estate can be quite fun and very profitable for the right person. Once you get enough knowledge and skills mastered you’ll find that it’s also much easier to do with fewer problems as well.