Finding Undervalued Homes
By Scott Wright Google
Finding undervalued homes in 2016 and 2017 has become so much easier than in the past. You really just need to find tune your skills. By modernizing your search efforts with apps and technology a person can greatly improve their undervalued home finding success rate.
These days I am often finding undervalued homes without ever leaving the comfort of my home. I have increased my success rates and greatly reduced any wasted time by applying some simple search tactics. One of my favorite tools is Google Street View. With this tool I can easily see a property, virtually drive though the neighborhood and get an excellent feel for the neighborhood the home is located in. This is fun and easy. In fact, when I use my Android Tablet I can actually stand up and as I move my body the tablet literally looks where I am looking on the street. It is virtually amazing.
Before you leave your home to look for undervalued homes you should always do your research. Do this first. It saves time, money, gas and the environment. You need to know things like:
- The most recent sales prices in advance
- Identify only properties in a half mile radius
- Look only at homes that are priced below recent sales
- Don’t look at listed sales prices as your only criteria
- Never forget you can offer less. It is called NEGOTIATING!
Remember this: When finding undervalued homes the more you save on the front end of a real estate transaction the more you can earn on the back end.
FINDING UNDERVALUED HOMES
There are many more things you should consider when finding undervalued homes. Here are some basic items to look for that will help you in the process of identifying undervalued homes:
- Unused square footage under roof
- Look for space to add a bathroom
- Enclosing a porch can add big value
- Will updating the kitchen add value?
- Realtor provided recent sales comps
- Financial room to do a modernizing renovation
- Would it pay off to demolish and rebuild
- Is the home the smallest in the neighborhood
- Determine the ARV (after repair value) versus repair costs
- Have a long term or short term hold exit plan
- Has the home been damaged?
- Do you need hard money lenders? (click here)
Finding Undervalued Homes
A fantastic method of finding undervalued homes is to target homes that have been damaged. Storm damage, fire damage and wind damage are just a few types of damage that make a home very attractive to an investor. It is very simple to determine the cost of a new roof. It is based upon square footage. So once you get some basic prices per square foot you can always apply that knowledge over and over again. People with homes that are damaged are usually under tremendous pressure to have it repaired. Yet, they are given a bunch of conflicting information. The insurance company tells them they have to “wait for an adjuster to come out”. At the same time the City and the County Code Enforcement Agents are all over the home owner with fines, threats and pressure to fix the home quickly. Trust me, as a homeowner this pressure can be debilitating. Many times they reach a breaking point and want to simply dump their problems. HINT: Your card and offer to purchase the home should already be in their hands. Oh, and where do I find these homes? Well it is simple! You should have no problem finding undervalued homes of this type in your local news reports, online news and in 911 reports. All of this is printed in your local daily newspapers each and every day. Sometimes under “Crime Reports”. Pretty simple huh?
Finding Undervalued Homes Via Condemnation
Condemnation is a fantastic way of finding undervalued homes. Condemnation reports are kept by your local community Code Enforcement Department or at City Hall. Condemnation notices are public notices that are published for the benefit of citizens of the community. This is government information that is readily available upon request. Most people don’t realize that all you need to do to access this type of information is to simply ask for it. Often it is even on the internet! Just look for it. There are a few things you do need to know about buying a condemned property:
- Are there running daily fines on the property
- Can the fines be negotiated down
- Is the property still hooked to the power line (is power available)
- Are stamped designs, blue prints and engineering required for the repairs
- Do you need a General Contractor or can you use a handyman
- Is it more profitable to tear down and rebuild something modern
These are just a few things to consider. As your investing knowledge expands this might be an arena you can passionately embrace. This is actually one of my favorite types of real estate investing these days. Condemnation, demolition, redevelopment and damaged homes offer so much profit potential it will blow your mind. It is amazing how the higher priced the property the more astounding the profit margin becomes. Check out this mansion redevelopment opportunity on Florida lake front property. This is an example of a property worth over $10 million dollars as a project that is being sold for only $2.6 million dollars now!
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