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5 Special Property Markets Investors Don’t Want You To Know About
If you are regularly involved in real estate investor networks, every once in a while you are going to hear the news about how a member got a great deal on a property that is obviously priced below what it’s worth in the open market… especially with a little staging.
And when you try to ask these investors who make profit-on-the-buy a weird habit, they don’t give you a specific answer of how they got wind of these deals.
You can’t really fault them as the people competing with them for these types of acquisitions will probably multiply ten-fold if they reveal the details.
Special markets are often where investors get killer deals.
But before you jump into any of them, realize that you need to do a little research on how to “attack” these markets. Or else, you might not just be unable to replicate these success stories, but also emerge worse off than where you started.
Here are 5 special markets to look deeper into… or maybe just get a little more acquainted to in case you are going in.
We hear about foreclosures all the time.
The irony is that this an area that newer real estate investors don’t want to get involved in. Either that, or they are still fixated on the perception that real estate is a beautiful game. Where nothing good is going to come out of foreclosure acquisitions.
Foreclosure rates are still at exceptionally high numbers when compared to historical data.
And there will probably never be a better opportunity to be in this market as a lot has to happen for a repeat of the events of 2008. There is potential for a sovereign debt crisis to occur in the years ahead. But that does not directly impact the housing market like how the subprime crisis did in 2008.
Most people would probably have heard of a foreclosure auction.
However, there are various stages in the foreclosure process. And there are various opportunities to acquire the property you have an eye on.
You might feel that banks would normally allow a little allowance for late payments. That is true a lot of times.
But there are also times where individuals are “blacklisted” and the lender has been waiting for an opportunity to take action on a borrower. So a simple default on a mortgage can be reason enough for the to start the foreclosure process.
There are various diverse reasons properties are put up for auction. One of which, as previously stated is foreclosure.
And it is not always the case where properties listed in auctions got there by force. Which is a reason why there are many types of auctions.
Sometimes after considering a variety of factors, property owners just decide that going the way of the auction is the best choice. Sometimes experienced investors do it to liquidate an asset they no longer want or just familiarizing with the auction process as a seller. Sometimes divorcees get advised by lawyers to put the house up for auction.
When a homeowner files for bankruptcy, the house is usually the most valuable asset that creditors see where their money owed will be coming from.
And often times, even if an individual who files for bankruptcy somehow gets to keep the house, he or she would not want it because of the extra financial burden it would put on them.
The advantage of bankruptcy deals in the eyes of investors is that the house would be various opportunities to buy the house without having the house ever being put in front of the eyes of the public. Meaning lesser competitors… if any.
An investor have the chance to acquire a property at any stage of a bankruptcy.
As long as you are able to identify a target, able to find the prospect and present your proposal, there is every chance that the home owner would accept.
And even if a house ends up in the portfolio of a creditor, there is every chance that the creditor wants to get it off their books as soon as possible to make way for real funds.
The probate process basically happens when someone dies and the courts have to decide how to allocate all assets.
It makes more sense to liquidate a house to pay off debts than to cut the house into segments and distributing each segment to creditors.
Because the main objective of selling the house is to settle any outstanding debts of the deceased, properties don’t always go at prices akin to an open market.
This is your chance to grab a quick deal. And at the same time be the champion on behalf of the creditors.
5) Government-owned properties
The biggest owner of real estate is undoubtedly the government.
Even a high profile property magnate with the biggest real estate empire in the world is peanuts compared to what the government holds.
Often times, government agencies and departments acquire real estate which they must dispose of.
There are countless reasons why these events occur. In fact, too many to list here.
The point is that when government agencies need to dispose of real estate on their books, you can potentially buy them at bargain price… if you know where to look.
It goes without saying that the 5 special property markets listed above are not the ordinary buy and sell most of us are accustomed to. This implicitly means that you might need a little niche expertise and knowledge to become successful players in them.
This is why they are usually markets for investors (especially experienced ones) as home owners usually find it too much of a hassle to get acquainted with how these markets work.
This leaves more opportunities for you as long as you are willing to put in the hard work into understanding the mechanisms they work within.