Building a profitable real estate portfolio is a proven way to attain financial freedom. However, finding profitable investments on a continuous basis is a challenge, especially in red-hot housing markets. When demand is greater than supply, housing prices rise causing many investors to struggle with finding those lucrative discounted properties. Here are some tips that will help investors find profitable deals in competitive markets.
Search for Less Competitive Markets
Although the housing market is hot in many locations, there are still regions in the U.S. where competition is minimal and prices are low. However, to find these markets, investors will need to step outside their comfort zone and look for areas where they do not normally invest. The Midwest, the Deep South, and some Southwestern locations are still affordable. Additionally, these regions are at the least amount of risk to see deep losses in value if the housing market does tank. Because properties in these regions are affordable and are typically not subject to the regular up and down cycles of appreciation and depreciation, investors can find profitable properties that can help them shore up their portfolios.
Look for “Quick Flips”
Finding a property that produces huge profits in a competitive market is a rarity. Therefore, many successful investors turn to “quick flips.” Essentially, they scale down the size of their projects and look for smaller investments that produce smaller returns. Foreclosures, short sales, and distressed properties will always sell at discounted prices in any market, so it should not be any trouble finding properties at reasonable prices that investors can flip in a short time frame.
Narrow Searches to “Off Market Properties”
The bottom line in today’s real estate market is many sellers want to market their properties privately. Instead of all the headaches of dealing with an aggressive marketing strategy, some sellers just want to go through the process quietly. This is good news for real estate investors who are struggling to find quality deals with “on market” properties. To find quality off-market deals, investors should contact agents in their chosen regions and ask for information about properties for sale that are not listed on the MLS. A few other tried and true methods to find profitable deals is through networking, word of mouth or to just keep looking around.
Keeping these tips in mind when you are looking to make your next investment in this competitive market, will make your next investment a breeze.