1. Identify the right markets
First and foremost, you need to identify the right markets. Maybe your local market isn’t the hot market right now. Maybe it’s a market in another county or state even. Search for the right market. The goal? Figure out where cash buyers are putting their money. That’s the key. While you don’t need a system to help you identify the right markets, it certainly helps.
2. Identify the right price
Not only do you need to find the right market, but you need to identify the right price. We’re talking about the price that not only you’re going to pay for the property. But also, the price that someone is going to be willing to pay to buy it from you. What’s the right price? There are proven algorithms in place that will help you identify and justify this. Clothier explains it like this.
3. Identify the right property
Now that you’ve identified that gap, you need to find the right property. Scour the MLS. Or, search online through retail channels. Look for distressed homes. Vacant homes. Possibly homes that are on the verge of falling into repossession or short sales. Going about this isn’t a simple task. Again, it’s easier to have a system to do this. But even without one, you can learn. You just have to start somewhere.
4. Identify the right buyers
You need to line up your buyers. Keep in mind, that when you secure a contract to purchase a home, you usually have about 30 days to close on it. You’ll need buyers lined up that you can flip those contracts to. Without cash buyers at the ready, you’ll need to do all the legwork once you’ve secured the contract, and that could turn into a major hassle for you. Clothier says you don’t want to be scrambling to find those buyers when it comes to crunch time.
5. Identify the right sellers
Clothier says that this is a bit more tricky. You have to identify the right sellers. Finding a vacant home isn’t always simple as 1-2-3. How do you go about doing this? What about homes that are near or close to entering into foreclosure? Clothier says that there are a few ways to do this.