Tips for Finding the Best Mortgage Investment Property
If you are looking for a mortgage investment property, it’s not enough to comb the listings if you want to find the best deal. Getting the wrong property can eat away at your profits, making the time that you spend managing the property much less worthwhile. The tips in this article are designed to help you look for the best mortgage investment property for your needs.
1. Look for people who are desperate to dump a property.
This might sound like a no-brainer, but it can be harder to get this information than you think. Privacy laws in Canada protect much of the information you need, so you’re going to have to rely on your network. Mortgage brokers will know about sellers who are ready to sell; one example would be a person with two mortgages on the same house, one from a bank and one (at a premium interest rate) from a private lender. Another person who is likely to be motivated would own two homes and only live in one; the likelihood is that he is paying two mortgages at once and would love to get rid of one.
2. Build quality relationships with the right mortgage brokers.
You’ll find that a small number of brokers are doing the lion’s share of the mortgage business. You want these brokers to think of you when motivated sellers pop up. Instead of doing an email blast, though, you have to research local brokers to find out the market leaders. Then, send them a small package that has a gift with your business card, as well as a brief letter introducing yourself and showing how you have the resources to move quickly if they come across a seller who is motivated. That sort of introduction will help you stand out from your competition.
3. Look for properties that have been on the market longer than the average.
If someone listed a house last week, or even last month, they may not have gotten to the point where they are ready to sell to you at a discount. Build a relationship with a real estate broker so that you can find out the average number of days that homes are spending on the market, and break that down by the specific area and type of home. For example, if you want to find a four-bedroom house in Victoria, use your relationship with your real estate broker to find out the average price for that floor plan in Victoria, as well as the number of days that the average four-bedroom home in Victoria is on the market before going to sale. If that number is 37 days, then start by looking for homes that have been on the market longer. Those sellers are much more likely to move at a discount. Also, the realtor on the listing will also be much more motivated, as they tend to refer to these types of homes as “stale” and want to move them and book the commission.
These tips are just the beginning when it comes to entering the real estate market as a mortgage investor. If you are ready to buy a house that is under pressure from an existing mortgage, you can make a tidy sum by flipping it.