How to Find the 6 Hidden Real Estate Bargains

In today’s post, Julie Broad of RevNYou is going to discuss how to find the hidden deals that you may otherwise be overlooking . . .

The next time you’re looking up at the clouds in the sky ask someone around you what shapes they think they see. I’m pretty sure they will see something different from what you see. But, once they explain why they think the clouds have formed a shape like a little bunny rabbit or a cup of steaming hot coffee, I bet you will be able to see it too.

“The eye sees only what the mind is prepared to comprehend”, said Henri Bergson, a French philosopher. The same can be said for finding hidden bargains in real estate. While many would-be real estate investors spend a lot of time chasing foreclosures or wholesale deals, the easiest deals may be passing them by because they aren’t watching for the hidden deals – the hidden deals that become so obvious when your mind is prepared to see them.

I’m not saying you can’t find great foreclosure deals or good wholesale deals. One of our best purchases was a foreclosure – but we didn’t set out to find a foreclosure – we were just looking for a good deal.

6 Hidden Real Estate Bargains and Where to Find Them

1) Price

This isn’t as obvious as you think it is. There are two critical pieces to finding properties that are priced as bargains. The first essential piece is knowing your comparable property values cold. How do you really know when something is a deal if you don’t really know what its current market value is?

The second part of finding price bargains is knowing what IS a deal and what is a land mine. Many times the price of a property is a hidden bargain, but it can also be a hidden money pit. As long as you know WHY the property is a deal, and it’s not something troublesome like requiring a lot of expensive repairs, then you may have uncovered a deal that many investors would miss.

2) Property Condition

Sometimes a run down property can be an easy and cheap fix up. If you are able to spot the difference between a property that needs $50,000 in significant repairs from the property that just needs $5,000 worth of cosmetic touch ups, then you will be able to quickly spot the bargains in the market.

3) Location

Finding the next emerging market is like finding an entire neighbourhood of hidden bargains. Seek out transportation improvements, large corporate relocations, and government investments into infrastructure improvements to spot areas that will see demand increase in the future. Even in tough economic times, there will be areas that will grow and prosper – but they won’t be obvious until after it’s happened so you have to look for them by doing some research – online and at your local government office.

4) Terms

Often real estate investors get so focused on price that they forget that they could negotiate other things into the deal to make it a real bargain. Patrick told a great story recently about just this in his article, Price, Terms, and TVs : How’s That for Creative Real Estate.

Remember, if the buyer insists on getting his full price, there are plenty of non-price things to negotiate on: closing dates, renovations, chattels, and even access to the property for repairs and showing to tenants before you close.

5) Highest and Best Use of the Property

Is the property currently being used for the purpose that, given it’s location and size, provides it with it’s highest and best use? As areas change and evolve over time, the answer to this question often becomes “no”. But, just because it’s always been a house, many people don’t think that it could become a four-plex or a parking lot or a small office that would double its rental income.

Learn the zoning for the area you are looking in, and keep your eyes open for properties that aren’t being used for their best purpose. Even if you know nothing about redeveloping a property, if you’ve found a hidden bargain, it shouldn’t be too hard to find a partner that will help you turn the property into a cash machine.

6) Lazy or Lousy Landlord Problems

There are plenty of motivated sellers that can be sources of hidden bargains, but to keep it simple, I’ll focus on one type of motivated seller that can be a really great source of hidden bargains – the tired, worn out, and frustrated landlord. Find properties that are vacant or run down and you just may find an owner that either has grown tired of dealing with their tenants or one that just doesn’t know what to do. If you know you can solve tenant problems or vacancy issues and the owner wants to rid themselves of this problem property, then you may have found a hidden bargain.

Once you know what to look for to find real estate bargains, these deals don’t seem hidden at all. By digging a little deeper when you’re doing your research, keeping your eyes open when cruising the streets, and keeping tabs on the local government activities, you will start finding the hidden bargains that may have been right under your nose all along.

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Julie Broad, and her husband Dave Peniuk, publish a free real estate investing newsletter where they share their secrets to becoming millionaire real estate investors. You can sign up for their newsletter and view past articles at: http://www.revnyou.com

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Tags: creative real estate investing, Julie Broad, Marketing, real estate marketing, RevNYou

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