When it comes to short term real estate investing, timing really is everything. With longer-term investments, in many cases the fact that you are going to wait a decade or two to sell means that you can rest fairly safely in the knowledge that your property will appreciate over that time. (Of course, this is not always true, but generally the timing is slightly less of an issue in long-term investing). However, in the case of short-term real estate investing, your ability to gauge what location will be in demand, then quickly procure and sell properties in that area is key to your success.
Now, there are some classic ways that you can use to determine the location of potentially “hot” markets. You can look at the school systems, the proximity to job sources and the general proficiency of the public works in an area to determine if it is going to be attractive to the general public. You can also work with a real estate agent to chart the progress of homes for sale in an area, then do your best to buy in that area. These methods often work, but you can end up paying more for properties than you want if you are trying to buy in an area that is already in demand. Motivated sellers tend to be less visible in these areas because the homes are easier to sell, which can make the “buy low, sell high” rule more difficult to enforce.
One of the methods that I have seen more and more often in today’s real estate market may seem kind of backward at first, but it is definitely effective when it comes to flipping in an economy where there are many, many more deals than there are buyers. In the past, real estate investors usually recruited motivated sellers. Now, however, they are starting to recruit “motivated buyers” instead. A motivated buyer is someone that has the desire and the ability to buy a home, but cannot do so through traditional means. Their credit may be less than perfect, or they may not have the standard 20 percent down payment that most lenders are requiring. They may already own one property and are not able to qualify for additional traditional mortgages.
Whatever the reason, these motivated buyers need real estate investors’ help locating a property that fits their requirements and needs when it comes to the details of the property and to the financing. You can help – and you can make some “fast money” in the process by simply getting the deal that they want under contract, then selling them the contract. You make money for your expertise and ability to find creative ways to finance; the seller gets their property sold, and the motivated buyer has a home, usually with a decent interest rate and a low down payment, even though he or she could not qualify for a bank loan. Everyone is happy, and you did not have to wait a decade or two for your investment to come to fruition.
If you are interested in short term investing in today’s market, marketing yourself to motivated buyers can be a great way to generate some cash. Many investors have actually determined what types of homes those buyers want, then go ahead and get them under contract, with the contingency that they can find a buyer or the deal is off. This streamlines the deal even further and can make your time with any given property very short.
Peter Vekselman has been successfully investing in real estate since 1996. He has completed over 1200 real estate deals, owned a construction company, been a private lender, and owned a property management company. Peter currently works with clients all over the US helping them achieve riches in real estate investing. For more information please visit www.CoachingByPeter.com.
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