Real Estate Investing

Bargain Hunting

Bargain hunting is searching for and purchasing real estate at a low price with the expectation of re-selling it for profit or renting it for profit. The key to successful bargain hunting entails one or more of the following:

1. purchasing property at an unusually low price.
2. realistically evaluating the property's actual market value to a retail buyer.
3. recognizing untapped or underutilized potential of a property.
4. accurately estimating closing costs to buy, closing costs to re-sell, costs to fix up or renovate, carrying costs ( taxes, insurance, etc. ), and any other costs one might incur that are specific to the contemplated transaction.

	For the Buyer
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Budd Lake $221,000.00

Bargain hunting is hard work. It requires careful analytical thinking and planning. Bargain hunting is also very time consuming. While the goal is to make a profit, carelessness, inexperience, or underestimating your own skills, financial resources, patience, and/or commitment to hard work can result in loss. Real estate, like any other investment, can be a source of great profit if done correctly or a source of great loss if done incorrectly. Bargain hunting is not a get-rich-quick scheme. It is a methodical, time consuming endeavor to make a profit ( hopefully a big profit ) by buying low and re-selling high.

There are several general types of properties that can be purchased at a very low price. These include distressed properties, fixer-uppers and highly motivated sellers. Let's take a look at each type, and the opportunity they present.

Distressed properties

Distress properties are properties that must be sold quickly or at a price below market value for compelling reasons. Distress properties may be acquired through a number of different scenarios including the following:

• Foreclosures.
• Sheriff sales
• Estate sales
• Corporate Owned real estate.

Handyman Specials ( also known as Fixer uppers )

A Handyman Special is a property that requires fixing up, repairs, or renovations that will significantly improve the value of the property. An important factor in making a profit with Handyman Specials is to properly identify repairs that add significant value versus repairs that add little or no value to the finished product. For example, properly renovating/upgrading a kitchen usually adds great value to a home because modernized kitchens are very attractive to most buyers. On the other hand, repairing or upgrading a septic system adds little value because buyers fully expect that any house they buy will be capable of disposing waste when they flush their toilets. For buyers, this is a firm requirement, not an optional feature. While a bad septic system may decrease the value of a home by approximately the cost to repair it, a new septic system does not usually add much value. Usually people who are skilled in carpentry, plumbing, electrical, masonry, or other similar areas can more easily take advantage of Handyman Special opportunities because their skills permit them to properly estimate the costs of various repairs and do the work themselves.

Their labor ( sweat equity ) is provided wholesale, and frequently people with these skills generally have the ability to buy materials at a discount too. Profit is made when the finished product is sold above the total cost of the purchase price plus all labor and materials used plus all carrying costs and closing costs. This is a popular way to make money in real estate.

Mr. & Mrs. Homeowner in debt:

This is by far the most overlooked scenario for investors to make a solid profit by buying low and selling high. Many homeowners are under financial or personal pressure to sell their homes. Sometimes, the burden of that pressure causes them to sell their homes quickly at less than full market value. Bankruptcy, divorce, high medical bills, or many other circumstances could play a role for the average Mr. & Mrs. Homeowner to sell fast at a lower price rather than to hold out for top dollar. Since there is a special urgency due to personal circumstances ( usually indebtedness ), Mr. & Mrs. Homeowner are very motivated to sell. However, unlike typical distressed properties or Handyman Specials, these pressured homeowners do not overtly advertise their dilemma to prospective buyers. Therefore, frequently these sellers must be identified through indirect means such as tell tale signs of some distress such as infirmity, neglected premises, voluntary admissions of homeowners, or a Realtor's insight or knowledge about Mr. & Mrs. Homeowner's woes. Negotiating with Mr. & Mrs. Homeowner is easier and less time consuming than negotiating with banks that own property foreclosed upon or corporate sellers of real estate.

Jersey Success Realty provides special services to careful investors who are interested in purchasing real estate available through a sheriff sale.

For more information

Email or call Jeff at (973) 691-0022 or (973) 347-8713.