Are you new to real estate investing and having a hard time finding good deals to buy? Or are you a seasoned investor having a hard time getting new inventory in today’s hot market?
Investors often get discouraged because of a lack of inventory in North Texas or it is purchased literally minutes after they find out about it. Many investors and flippers get upset and begin to believe their town is too small to flip homes or too big and competitive. Even though every market and area is different, there are almost always good real estate deals to find and to flip.
Below you will find some of our favorite methods for finding great real estate investment and property deals.
HUD and VA Homes –
HUD stands for the Department of Housing and Urban Development. HUD helps provide housing for lower income families by providing lower rate loans. It also enforces fair housing laws. There are many other things which HUD does as well.
VA stands for the Department of Veteran Affairs. Like HUD, they also help provide lower rate loans to help veteran’s and their families obtain housing.
Like with normal bank financing, there are also HUD and VA homes which go into foreclosure. They are usually referred to as government foreclosures. A HUD property is a house with a FHA (Federal Housing Authority) backed mortgage that goes into foreclosure. Likewise, a VA property is a VA backed mortgage that went into foreclosure.
Most HUD and VA foreclosures are extremely cheaper than comparable market properties.
Distressed Deals –
Ever had foundation problems or roof leaks with a home you have owned? Or perhaps ran into a hoarder home or mold during a property flip? These issues can be a real pain and potentially expensive. Especially when you run into several of these issues at the same time combined.
Properties that have roof or foundation issues, fire or water damage, tornado damage, back taxes owed, hoarder problems, animal or pest infestations, etc. are defined as distressed properties. A distressed property could also be a home that is just really ugly or needs a tremendous amount of work.
Often owners of distressed properties are overwhelmed and don’t have the time or finances to fix the house. Or perhaps they have inherited a distressed party as part of a trust or will. Trying to sell a distressed property through conventional means is very difficult and few people want to even view the house, much less consider the cost to rehab it. It would cost the average home owner far more than a professional contracting company to renovate the home.
A home investor however can use a great home renovation company, like Renovation Gurus, to quickly turn the impossible into a positive investment.
Distressed property owners often have to sell and sell quickly.
Bank Owned Properties – Major U.S. Banks are motivated to sell their foreclosure properties. Why? Because when a home is in a banks inventory there are fees due each month called “carrying costs”.
Carrying costs include items like insurance, maintenance, taxes and more. If a home isn’t maintained or checked on, it could become a target for squatters. Additionally, if a home isn’t maintained it may look or feel abandoned and is more likely to fall prey to vandalism. Theft is very probably too as copper prices continue to rise. A copper thief can quickly cause thousands of dollars of damage to a home – and the bank has to cover these costs and risks!
The longer a house is tied up in inventory the more opportunity costs the bank incurs. For instance, instead of $100k being tied up in a house that isn’t moving and is costing money – the $100k could be loaned out to a business with good credit and make a good annual percentage return. So instead of having their money on the street earning more money – the money is tied up in a house and costing them money.
Banks are therefore likely to sell a home quickly and at a deep discount if the property has been on the market for any lengthy amount of time.
So if you are a real estate investor and are having a hard time finding inventory, or affordable inventory – try these methods to find quality homes at affordable prices quickly. And remember, if the home needs considerable repair, consider Renovation Gurus to come in and handle the rehab for you and thus save you peace of mind and time.