Most real estate investors don’t have a strategy, because most investors only own a couple of properties.
The most successful investors definitely have a specific strategy.
It’s not a flippant question… it’s pretty serious, really, when you think about it. After all, your investment strategy is the one that’s going to guide you to the end.
What’s your end game look like?
If you’re looking to create a really dynamite strategy, you have to begin with the end in mind. That may sound trite, but it’s quite true.
If you don’t know where you’re going, how will you know when you get there?
For investors who want to grow a serious portfolio of high-value properties, it’s insanely important to have a good acquisition strategy.
A good acquisition strategy starts with three basic criteria:
- What kind of property do you want to buy?
- Where do you want to own?
- How much can you afford to buy?
Although those are simple questions, you shouldn’t rush to answer them without doing some serious homework.
Most investors simply choose neighborhoods for investment based on what they already know, and there’s nothing wrong with that.
But keep in mind: it’s quite possible that there is an undervalued neighborhood or town not too far from you that might be ready to burst up in value.
In a big city, trendy bars and nightclubs are often early indicators of increased future demand. Picking up discounted property to rehab and rent in these locations can be quite lucrative over the long term.
Building permits for big developments can be a sign of great things to come, especially if their big marketing budgets help attract folks to the neighborhood who wouldn’t otherwise be looking to live near your investment. There’s nothing wrong with sticking a sign near a big development pointing to your property (as long as your local ordinances allow it).
Zoning changes can be a sign of future growth, too – and if it works in your favor can add quite a lot of value at the same time.
Let’s say you manage to get a tear-down single family house on a huge lot for a deal, then the zoning gets changed so that a developer can build 6 big condos on it. That zoning change could double the value of the property – or even more, depending on what you bought it for and the value of the future development.
Getting to know local politics, future developments and pending zoning changes will help you to shape your acquisition targets for maximum value, but it’s not enough.
Most important, your acquisition strategy must include a specific plan to reach people who have the properties that you want to own.
At the most basic level, that can mean working with a real estate broker who will alert you to new properties that hit the market. You can also set alerts on sites like Zillow.com to automatically message you when a new property hits the system.
But advanced investors who are building a serious portfolio often want to directly work with sellers to avoid paying commissions and directly negotiate.
Many investors are working the auction, short sale, foreclosure, and tax lien markets pretty hard to acquire discounted property. Each one is its own specialty that requires intense focus and insider information in order to get the best deals.
Other investors are setting themselves up with targeted websites built to capture search engine traffic for commonly used keyword searches from motivated sellers, like “sell my house fast” or “we buy houses” or “foreclosure help”.
InvestorCarrot offers a really affordable price to launch a Motivated Seller website in just minutes that’s proven to convert traffic into leads.
Check out a demo video here to see all that InvestorCarrot can do for your acquisition strategy. Setting up the website is the easy part.
Implementing your investment acquisition plan takes time, but a successful real estate investment portfolio will create financial independence for you and your family.
Isn’t that worth the effort?
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