“Making money on the buy” means that the price you pay upfront largely determines your profit potential. Here's why this principle is vital for fix-and-flip and BRRRR deals:
Risk Management: Purchasing below market value provides a safety net to cover unexpected costs or market changes. Whether it’s unforeseen renovation expenses or slower sales/rental periods, buying at the right price protects your investment.
Maximized Profit Margins: A low purchase price leaves more room for profits after accounting for renovation costs, holding costs, and other expenses.
Leverage for Growth: For BRRRR investors, buying under market value allows you to refinance at a higher value post-renovation, enabling you to pull out more equity and reinvest in new properties.
Cash Flow Boost: Buying at a discount can reduce your mortgage payments, improving your cash flow for rental properties.
How to Find Profitable Deals
Identifying the right property at the right price is the cornerstone of real estate investing success. Here are proven methods to find properties that allow you to “make money on the buy”:
1. Direct Mail Marketing
Reach out to property owners directly through postcards or letters, targeting those who may be motivated to sell, such as owners of distressed properties, absentee landlords, or those facing foreclosure. Rescover.com is a great platform to be able to filter and target potential sellers!
Pro Tip: Include a personalized message and emphasize the speed and ease of your purchase process to attract interest.
2. Networking with Wholesalers and Agents
Wholesalers specialize in finding discounted properties and assigning them to investors for a fee. Building relationships with real estate agents can also give you access to off-market properties or pre-listings.
Pro Tip: Attend local real estate investment groups or networking events to connect with professionals who have access to hidden opportunities.
3. Driving for Dollars
Physically scout neighborhoods to find properties in poor condition that may indicate motivated sellers. Look for signs like overgrown lawns or neglected exteriors.
Pro Tip: Use apps like DealMachine to log and track properties you discover while driving.
4. Online Marketplaces and Auctions
Platforms like Auction.com, Craigslist, and Facebook Marketplace often feature discounted or distressed properties. Local government auctions are another excellent source for foreclosures.
Pro Tip: Be cautious at auctions, as some properties may have limited inspection opportunities or require cash payments.
5. Public Records Searches
Search for properties with tax liens, code violations, or other legal issues. These properties are often owned by motivated sellers willing to negotiate.
Pro Tip: Check your local county's public records or tax assessor's office for property listings.
How Unlocked Capital Can Help
At Unlocked Capital, we specialize in helping real estate investors finance their deals, ensuring you have the funds to secure profitable properties and maximize your returns.
Our Services Include:
Acquisition Loans: Quick funding to secure underpriced properties.
Rehab Loans: Flexible financing to cover renovation costs.
Refinancing Solutions: Tailored options to pull equity from BRRRR properties and reinvest.
With our expertise, you can focus on finding deals and growing your portfolio while we handle the financing.
Ready to take the next step? Contact Unlocked Capital today to learn how we can help you secure funding for your next deal. Together, we can help you grow your real estate portfolio and achieve your investment goals.
Learn more at Unlocked Capital.