6 real estate investors on the best deals they’ve scored on homes

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John Stuart Mill, 19The tenthA British economist of the last century, who in his 1848 book Principles of Political Economy shared this general thought: “Owners get richer in their sleep.”

He was right. In the nearly 175 years since then, the vast wealth derived from investing in real estate has been passed down from generation to generation. But you don’t have to be a millionaire to start your own career as an investor.

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A modest purchase can turn into a profit – money that you can reinvest in another property. Or keep the property and let the rental income pay your mortgage payments, with the money left at the end of the month. Relax and watch your investments grow in value.

GOBankingRates asked investors about some of their favorite investments, and you’d be surprised how little investment some of them made to make a big profit.

Pennsylvania gem

Ryan David, a Pennsylvania real estate investor, said he was contacted through his website as soon as it launched about a potential purchase.

“We received evidence of a piece of property restricted in ownership of a family member who was living in four states,” David said. “We closed for about $15,000, which was the price they asked for, and then immediately resold the property to another investor for $55,000. No work or rehab done, just a quick resale. To this day, this is the biggest spread I’ve made. done in one simple transaction.”

Memphis Moneymaker

San Diego-based Danielle Walter, who runs the blog The Million Dollar Mama, said she’s invested in a variety of real estate over the years, but the home that stuck with her was a home in Memphis, Tenn.

“The single-family home needed remodeling. I bought it for $76,000 and paid the contractor $20,000 in installments to do the remodel,” Walter said. “I had to fire this contractor and hire another one to come and fix the first for another $20,000.

“I was going everything to $116K. When I went to refinance, the property was valued at $156,000, giving me immediate ownership of $40,000. The mortgage (including taxes and interest) was about $600 a month and the rent received was $1,200. per month”.

She said she was in the process of selling the Tennessee property, which is now valued at $210,000.

Entry and Exit in Indianapolis

Alain Perez-Majul is a full-time real estate investor through his company, Virtue Cash Buyers in Indianapolis, and he shared this story of a short-term purchase that turned out to be a winner. He said it was a “very old” multi-family estate and was so worn out that it had to be demolished.

“The owner was living in Chicago and didn’t want anything to do with the property because it was giving him a headache, and I was able to help him by raising his hands,” he said. “I held the property for two months and sold it to another investor at a profit of $80,000. Within a month, the property was demolished, and to this day – I bought it about four years ago – it’s still just an empty plot of land. I think the investor is waiting for the area to turn a bit more before build upon it.”

dirty joy

Benjamin Dixon, a licensed associate real estate broker with the Mackay Dixon team at Douglas Elliman in New York City, was working with a client to find an investment property. He used this strategy: Find “the dirtiest possible house in the best location.”

“Many buyers don’t have the imagination to look beyond windows, dirty walls that need to be painted or floors that need refinishing,” Dixon said. “I recently found a great property in Bridgehampton for a client. We bought a very tired 1970s house for $2.8 million and renovated a million dollars to update the house. It is now on contract for sale for $6 million, and I have a very happy seller.”

handshake deal

For Thomas Satas, one of his best deals fell into his lap when his cousin called and said his neighbor wanted to sell his property. Satas, founder and CEO of Windy City HomeBuyer, met the seller, a gentleman who wanted an easy deal without real estate agents, longtime buyers, and inspectors walking into his house.

“I checked the house, and it had some major issues. Satas said. I talked to him about this and asked him how much he wanted it. He almost fell when he told me. (I) asked him how he got to that number, and it was double what he paid.”

The man was still working at 80’s prices. I explained to him that he could make more money if he was evaluated; But, if he wants, I’ll write him a check right away. He kept his simple life simple, took the check, fixed the foundation and a few other problems, and in terms of ratio, he had (the largest) margin of any flip I’ve ever made.

“The best property I ever bought was a handshake deal. I knew he was in the lumber industry, so I sent him a pretty big home improvement store card to thank him.”

Patience pays off

For Alyssa Carpenter, it took patience to find a seller willing to accept FHA financing in Austin, Texas, while she was searching for her first home: a duplex that doubled as an investment property.

“I was able to secure this property at a 3.5% cut at a 2.5% interest rate,” said Carpenter, who runs the financial website FI/RE Manual. “After a short renovation, I was able to increase the rent from $700 for a one bedroom and one bathroom to $1,400 for the same unit. The tenant renewed the lease for a second year. I just moved in from the other side (three bedrooms and two bathrooms) and rented it for $1900” .

She continued, “Being able to purchase a duplex as an investment property with as little effect as possible has had an incredible impact. Total rents are $700 per month on the mortgage. The value of this property has also gone up from the purchase price of $390,000. I received a soft offer from another investor at a price Buying $515K. I’m not selling yet, but it’s amazing to see this appreciation in a few years.”

their advice

Real estate investors have shared their tips for those interested in investing in residential real estate themselves. It starts with networking and marketing yourself as an investor so potential sellers know they can turn to you.

“Tell anyone… you’re a real estate investor and you’re looking to buy a property,” said Antonio Cusin, Realtor/Owner of Service 1st Real Estate in Louisiana. “You never know who you might run into that might need to sell and can help you. It’s also a good idea to join the local real estate investor association and network within the group. Networking within networks can lead to additional opportunities or even a partnership.”

For a seasoned investor, there is no substitute for knocking on doors.

“In the industry, this is called driving for the dollar, where you drive in a desirable location and knock… doors with width,” said Craig Stevens, founder of Groundbreaking Real Estate in the New York metro area. “This technology allows the investor to avoid any bidding wars and can help develop a relationship with the owner since the negotiations are conducted face-to-face. Since the property is not already on the market, some owners may be surprised by the value of their current property and tempted by the possibility of selling so quickly.”

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About the author

Jamie Farkas has a degree in Communications from California State University, Fullerton, and has worked as a reporter or editor for dailies across the United States. She offers the GOBankingRates experience as a sports editor, business editor, religious editor, digital editor – and more. With a passion for real estate, she passed her state’s real estate licensing exam and is still considering whether to sink into selling homes — or just write about selling homes.

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