My husband and I have built a multimillion-dollar real estate portfolio in eight years, in our spare time. We’d have done even better if it weren’t for a few very big mistakes – which we now spend a lot of time helping other beginner investors avoid.
The properties that have given us enormous appreciation and excellent returns are the ones we bought in areas that we’d been watching for at least six months, sometimes even for years.
When you get to know an area intimately, you can spot deals and snap up a property before anyone else. We bought our current home for $20,000 under market in a time of bidding wars by buying it two days before it was listed.
Here’s how to find hot deals like that:
- To see what’s on the market, go to open houses on a regular basis for all kinds of properties. (These are usually scheduled from 2:00 – 4:00 p.m. on Saturdays and/or Sundays.)
- Get a sense of asking prices by looking at local listings in the newspaper or online (MLS.ca for Canadian investors, Realtor.com for U.S. investors to find properties for sale by a realtor).
- Drive by – or, better yet, go for walks along – the streets you’re interested in. Chat with the people you meet. Find out what they like and don’t like about their neighborhood. Look for signs of change. (People who are cleaning up their yards and painting may be getting ready to sell.)
- Ask questions of the agents at the open houses to find out what other houses are selling for in the area. Ask them about the places they think are the real gems.
Over time, you’ll develop a keen sense for what various types of property should sell for in the area. You may even get wind of one that is going to be on the market before it gets listed (like we did). It’s worth the extra effort, because then you will be more likely to make money on your property the day you buy.[Ed. Note: Julie Broad is a real estate investor and a member of ETR’s Internet Money Club. In eight years, Julie and her husband have built a multimillion-dollar real estate portfolio in their spare time with minimal cash resources. They publish a free monthly newsletter to help other rookie real estate investors achieve their investment goals..]