Do you know what it takes to make money as an investor in Detroit? Learn 5 ways to outsmart other investors when buying real estate so that you can come out on top!
With more and more people investing in real estate each day, it’s important that you have a few tricks up your sleeve so you can stay competitive. In order to outsmart other investors, you will have to stay informed, prepared, and be willing to offer a little more to a seller in order to close a deal. This doesn’t necessarily have to be more money. It can be a faster closing, help with a move, or anything else that could help the seller of the property you are after.
Work With A Professional Buyer or Wholesaler
When you develop a relationship with a professional home buyer or real estate wholesaler, you will get access to off-market deals before others do. You will be able to get inside information without having to dig for the details yourself. The buyer or wholesaler finds the properties, does the research, presents you with the information, and leaves it up to you whether to buy or not. While you could dig up these deals on your own, working with a professional can save you a lot of time, and as they say, time is money.
Get In Your Car And Drive
Do you want to beat other investors to the punch? Then you have to find the properties first. Driving for dollars has always been a way investors find potential deals on Detroit real estate. Look for older or unkempt houses. They may be home to a motivated seller, who only needs a little nudge to sell the property to you. When they get an offer from you, they may realize they have been holding on to their unwanted property for much longer than they should have. Get in your car and drive through the neighborhoods you like. If something sparks your attention, find out who owns the house, and get in touch. You can send a letter, just make sure the owner doesn’t feel as if you have violated their privacy.
Know How To Make A Good Offer
Your offers should be presented well, laying out any details you would like to include. Make sure things are clear, so there is no room for disagreement down the road. The offer price should be realistic. Don’t try to get the lowest price possible on a great property, you will likely be outbid. Instead, present a realistic offer, along with any other benefit you are able to provide such as a fast closing or a generous amount of earnest money. People tend to offer 1-3% in earnest cash. The more you can offer, the more serious the seller is likely to take you.
Have Your Financing In Place
Investors of Detroit real estate will likely be paying in cash. This can give them a big advantage over buyers who are using financing if a seller likes the idea of closing right away. (And who wouldn’t want to get their money right away?) When investing in Detroit real estate, be sure to have your financing in place beforehand so the seller doesn’t have to wait for you to get approved or gather the money together from other sources. If you can, pay cash for the property. If this isn’t realistic, make sure your offer includes a copy of your pre-approval letter so that the seller can see that yes, you can actually pay the amount you are promising.
Lessen Your Contingencies
Including fewer contingencies in your offer will give your seller more peace of mind that the deal will go through. When people make offers with contingencies on the appraisal or inspection, it gives them an “out” after making their offer. This means the deal is less likely to go through. No seller wants to be in this situation, so by eliminating these contingencies or at least modifying them, you will be able to give the seller the peace of mind that the deal will go through. Eliminating contingencies can come with some risk. Only reduce your contingencies if you are certain they won’t come into play. You don’t an inspection or appraisal to come make saying the property needs work or that it isn’t worth anywhere near what you thought, then finding you still having to follow through with the purchase or risk losing the earnest money you put up along with your offer.
With more and more people investing in Detroit real estate, it’s important to know how to outsmart other investors in Detroit. Let our team help you find the best deals on the highest quality investment properties in the [market-city] area.