One of the most important jobs of a property investor is to source below market value property - that is, a property bought for less than its value if it was to sell on the open market.
For example if you were to purchase a 100,000 pound property for 80,000 pounds you will have bought it at 20% below market value. This property will have 20,000 pound of equity which is yours to keep. Furthermore, since the property is under valued, theres a strong likelihood that you will be able to buy it with no money down.
In other words, without requiring a deposit. Theoretically, you can buy as many properties as you desire without ever using any of your own money whatsoever! If you are able to do this repeatedly, your business will experience phenomenal growth.
In contrast, if you were to buy a market value property, the traditional routes of property purchase would demand a deposit of anything from 5-10%. As a Property Investor, if you were only to buy property at full price, you would soon run out of money and your business would come to a stand still.
This is why it is so important for a Property Investor to invest as much as possible in properties below their true value.
So, how do I find below market value properties?
Regardless of what people say, I find estate agents to be a valuable resource when it comes to buying below market value property.
By being persistent, and proving to an estate agent that you are a serious investor, you will have them ringing your phone of the hook with potential deals. Initially, an estate agent may pass you deals that are not below market value.
If this was to happen, thank the agent for calling you and let him know that the margins dont work for you. However, you are still looking to buy several properties that month and he should contact you again if he receives anything.
At all times, remain polite and check with the agent at least once a week. Over time, a relationship will develop with your estate agent and he will start passing on good property leads which meet your investment criteria.
Once you have completed on a couple of deals why your specified agent, you will find that he places you on his preferred list of contacts. This is where you need to be to receive the great deals.
Ideally, you should be a preferred contact for several agents in your area. This way, you will ensure that you will hear about any potential property deal first...