If there's any question I've heard hundreds of times, it's probably this one.

“Which counties are the best for finding land deals?”

It's a great topic for discussion because choosing the right market can and will have a HUGE impact on your ability to find great acquisition opportunities that are cheap enough and yet still have a big enough margin to resell them for a pile of cash.

When people ask this question, they want a concise “1 + 1 = 2” answer.

I wish the answer were this straightforward, I really do (it would save me a ton of time explaining it to people), but as with most things, SEVERAL variables can make a county an ideal or less-than-ideal place to start pursuing vacant land properties.

In this blog post, I will explain the most important attributes I pay attention to when evaluating new areas to invest in.

And for those who need a simple, black-and-white, formulaic answer, I will give you one of those, too. I can't promise the simple answer will always lead you to the right place, but with any luck, it might just help steer you in the right direction.

1. Population & Proximity

One of the first things I look at when deciding which county to pursue is not only the population of that area but also its proximity to the nearest major metropolitan area.

Why? Because as a vacant land investor, you will find far more acquisition opportunities in RURAL counties with a sparse population than in densely populated counties.

How sparse is “sparse enough”? It's not an exact science, but as a general rule, I try to look in the counties surrounding the big metropolitan areas, anywhere from a 1-3-hour drive to the big cities.

For example, if I were working in southeast Texas, I wouldn't start looking in Harris County (where Houston is located). I would start looking in the counties surrounding Harris County, like Brazoria, Chambers, Liberty, Jefferson, Hardin, Montgomery, Waller, Washington, Wharton, etc.

Aside from picking these rural markets surrounding the big metropolitan areas, it also helps to do this in states where the population is growing and not shrinking.

How can you figure this out? There are many ways to do it, but the simplest one I know of is the North American Moving Services migration map.

Keep in mind that this is the ultra-simple way to evaluate a market.

If this is the furthest you're willing to go, it's better than nothing, but if this is all you're willing to look at, you could easily make a bad decision and work in a market where things will be harder than they need to be.

See below for a more detailed picture of what's happening in the markets you're considering.

2. Sold-to-For-Sale Ratio

If you're looking for more data you can chew on, let me introduce you to the Sold-to-For-Sale Ratio.

This is nothing I invented. I know many other land investors who use this approach to determine in which markets they can sell their land fast vs slow.

For most land investors, the selling side is where they see the biggest bottleneck, so if you can work in an area where your land will naturally sell faster, that's a nice advantage!

How It Works

When calculating the Sold-to-For-Sale Ratio, I usually use Zillow and possibly another source, like Redfin or Realtor.com.

Once you're on Zillow, follow these steps:

1. Select County.
2. Select Lots/Land from Property Type.
3. Select Only “For Sale” Properties.
4. Under More, Select Acreage Range (10-20 Acres or whatever property size you’re targeting – if you filter it from 5 acres and up, you can usually avoid the ultra-cheap properties in most markets).
5. Under ‘More,’ Select ANY Days on Zillow.
6. Zillow will show you the number of results in the right sidebar.

Now, repeat the same steps, but change “For Sale’ to “Sold,” and under ‘More’ only select the past 12 months (instead of ANY time range).

Once you have the total number of properties “Sold” in this time range and the total number of properties For Sale today, divide the sold number by the for sale number to get your final number.

In this case, when sorting the property to include only vacant lots between 5 – 20 acres in Denton County, Texas, we can see 61 Sold over the past 12 months and 100 For Sale.

61 / 100 = 0.61

What does this mean? Is this a good or bad ratio?

If you see a ratio of 1.00, this is a clue that there is good equilibrium in the market. In essence, this tells us that for every property listed today, the same number of properties have sold over the past 12 months.

A ratio higher than 1.00 indicates more demand than supply (a seller's market). A ratio lower than 1.00 indicates there is more supply than demand (a buyer's market).

Either can work, but if it’s below 1, you should expect sales to be on the slower side, and as such, you should err on the side of offering lower amounts for the properties you buy. If it's above 1, you can expect properties to sell faster than average, and you can take more liberties by offering higher prices.

There isn't a magic number, but I like to see a ratio between 0.75 and 1.50.

Some people are fine with a ratio as low as 0.50. Some are okay when it's as high as 2.00, but it is important to understand what this number tells you.

It's great when properties sell faster, but remember, you don’t want the area to be too hot either. For example, if you see a ratio of 8.00, this is way too hot, and based on this ratio alone, it's a clue that it will be very difficult to find properties to buy in a market like this because the demand far exceeds the supply.

Go through this exercise for 5 – 10 markets and compare the numbers. Based on what the ratios say, some of them will make a lot more sense than others.

Why Use a Second Data Source?

Why can't we just work with Zillow and call it good? Why get Redfin or Realtor.com involved?

In some cases, I stick with Zillow and call it good (because it is usually pretty accurate), but using a second source of data is to help ensure Zillow isn't missing anything. For example, if I find that Zillow and Redfin are showing me wildly different results, I may want to find a third data source and run the numbers a third time, so I can spot which one is off and make sure I'm getting an accurate look at the market.

Why Look Back 12 Months for Sold Comps?

Why not 3 months, 6 months, or 24 months? There is some subjectivity to this. You could use 6 months if you wanted, but you'd want to account for the difference that half the time would give you. I like to look back 12 months because a full year will help me see a well-rounded picture of the market in case there are any seasonal peaks or valleys in the numbers (in many markets, properties sell much slower in the winter months than in the summer).

What the Ratios Don't Tell You

This calculation isn't perfect because our available data usually won't include every property listed or sold in your market. For example, it tells us nothing about the properties listed or sold FSBO. If someone sold their property on Facebook Marketplace, Craigslist, or Land.com, those numbers won't necessarily show up in the Zillow database.

Even so, it’s still good enough to give you an idea of what’s happening.

3. Transaction Volume

The Sold-to-For-Sale Ratio matters, but this number alone won't tell you the whole story.

You can have great ratios, but if only a few transactions happen for your ideal property type in the county each year, this isn't enough to build a thriving, sustainable business. A market with a small volume of transactions will also make it harder to find professionals you can work with repeatedly (like agents, title companies, drone photographers, etc.) because there won't be enough volume to sustain those relationships.

As such, we want to see evidence that plenty of deals are happening each year.

How many transactions should you see?

It depends a lot on how large the county is. If it's a massive county in southern California (San Bernardino County, Kern County, Riverside County, etc.), you should see hundreds, maybe thousands of transactions each year, depending on how narrow your filtering criteria are.

If it's a smaller county in the Eastern half of the U.S., you might see a few dozen transactions per year. When I'm looking at these numbers for a county I plan to work in again and again, 100+ is great, 20-100 is okay. Less than 20 is pretty low.

4. Days On Market, Views & Saves

Along with transaction volume, it's also helpful to know how long properties typically take to sell.

For this, we can head back over to Zillow.

We'll have to filter our search by the state, county, price range, and, most importantly, lots and land.

You can also specify a lot of other characteristics if you want, but this should work for this example:

Each listing displays how many days each property has been listed on Zillow.

You can spend some time manually looking through each one to get a “gut-level” idea of how long the average property sits on the market before it sells, or you can also use a tool like Price Boss, which can automatically pull out this data for dozens of listings and find the average and median days on the market for you in seconds.

Whichever way you decide to do it, this number indicates how quickly properties are selling in your market.

When I'm looking at this data, if I see that the average number of days on Zillow is 150 or less, this tells me properties are selling fast.

If the average number is a bit longer (around 365 days), this tells me that the market isn't necessarily “hot,” but it's not terrible, either. Properties are selling eventually, but not at break-neck speed.

When this average number gets up to 700, 800, or 900 days or longer, this tells me that properties are moving slowly.

Keep in mind: Most of these listings and sellers come from a different situation than you. These property owners probably didn't buy their land for pennies on the dollar. That means YOU should be able to list and sell your property much faster than the average days on the market. Even so… this is still a good metric to help you understand how quickly the “normal” properties are selling in the county you're considering.

How Many People View Each Listing?

While you're on Zillow, clicking on several of these listings and looking at the “See more facts and features” section is useful.

This will pop open a new box with a lot of information, and if you scroll to the bottom, you'll see an interesting piece of information.

This doesn't just tell you how long it's been listed; it tells you how many views the listing has gotten in the past 30 days.

When you understand what this means, it's quite useful.

In some counties, most listings will have only a handful of monthly views (anywhere from 0 – 20).

In other counties, you'll find that some listings have well over 1,000 views. The market is very interested in these properties!

Like the “Days on Zillow,” finding this number for ONE property isn't enough information to draw any real conclusions, but when you look at 10, 20, 30, or more and keep track of how many views each of these listings is getting, this is another helpful clue that tells us how many people are interested in these properties.

And if people are interested in these listings, some will go so far as to save the listing (an even stronger indication of engaged buyers in the area).

All of this data is free and easily accessible all over the United States, so before you start working in a new county, make sure you spend some time getting a good understanding of how much activity there is in the market.

5. Value and Desirability

Before you sink your investment dollars into any property, always ask yourself…

What is the highest and best use for this property?

Is this the type of property a lot of people would want to own?

If a property can be used for it's highest and best use, are there any secondary uses that are still valuable?

To answer this question, we must ask ourselves,

What makes a property valuable and desirable in the first place?

Most people could guess that it has to do with the property's geographic location, but it also helps if you sell real estate in an area where people want to be.

For example, let's consider the places people choose to go on vacation.

• Warm places (Southern States)
• Areas near large bodies of water (West Coast, East Coast, Great Lakes, Islands & Peninsulas)
• Areas with mountains and geographic beauty (the Rocky Mountains, Smoky Mountains, Grand Canyon, California Coast, etc.)
• Areas near big national parks (California, Washington, Texas, Montana, Wyoming)
• Areas with things to do (hunting, fishing, hiking, skiing, snowmobiling, camping, horseback riding, theme parks, etc.)

It's never quite as simple as labeling an entire state as “good” or “bad,” you need to evaluate the specifics of each county and city to get an accurate picture of what an area has to offer.

Every state has counties that are great for land investing and others that are pretty lousy to work in… so before you say,

“The state of ________ is perfect for land investors.”

Make sure you understand what each specific COUNTY offers before jumping in.

6. Property Types

There's a reason we DON'T want to work in densely populated counties.

When you think about all the vacant land that's available in a big city, it almost always falls into one of two categories:

Category A: Extremely valuable parcels in high-traffic areas.

Category B: Dumpy parcels in terrible parts of town.

When you come across those “Category A” parcels, it is highly unlikely that you'll get them for a low price. It's not impossible (I've done it before), but it's kind of like winning the lottery; the odds are not in your favor, and it's not something you should plan your entire business model around.

When you come across those “Category B” parcels, and the seller accepts your low-ball offer, these properties are usually not the kind you (or anyone else) will want to buy. Trust me.

In my first year of land investing, I almost made the mistake of buying this half-acre lot in the inner city of a dumpy town.

It looked fine from the satellite pictures, but when I drove to the property and saw it with my own eyes (and the surrounding neighborhood), my common sense kicked in, and I ran away before it was too late.

The problem with vacant lots in big cities is that, for the most part, they only have a couple of practical uses:

1. Building a new structure (like a house or garage).
2. Adding to the footprint of someone's existing yard.

If a vacant lot is situated in a thriving, upscale neighborhood in the city – you're golden! These are the neighborhoods where people want to be, and it's not difficult to sell vacant lots in these neighborhoods for either purpose.

However, if a vacant lot is situated in a dilapidated, trashed-out, war zone neighborhood, selling for a profit will be much harder. Simply owning them could be way more trouble than they're worth.

The problem with most densely populated counties is that when you find vacant land deals, many will be situated precisely in the parts of town where you DON'T want to buy.

When you're looking at a property with only one feasible use: building a new home, and that property is located in the nastiest, decaying part of the city, do the math. Will someone spend top dollar building a new home in the ghetto? Rarely. I won't say never, but it's not very common.

So… there are certainly some vacant land opportunities in densely populated counties, but your chances of finding great opportunities are less likely compared to what you'll find in most rural areas.

7. Property Values

Something most people don't realize is that it's fairly easy to figure out how much a hypothetical property will sell for in any given market.

Most areas within these systems make it easy to find sales data going back three years or more on almost any property. This can be done on Zillow, Redfin, Realtor.com, Land.com, and any other major land listing website.

In this video, I'll show you one way to do it with Redfin…

When you have this information, there's no reason to wonder how valuable properties will be in your target market because you can see exactly what they've been selling for (and what they're currently listed for) over the past few months or years.

If you're unsure what kind of market you're getting into and whether the price ranges will be in the right place relative to your budget, some sales comp research will quickly get you up to speed!

8. County Resources

If you're like most land investors (especially those who rely on delinquent tax lists, conduct self-closings and/or do their own title searches), something you'll inevitably have to deal with is the county office.

When you start working with these county workers and their systems, you'll learn quickly that some counties are fantastic, and others are an absolute nightmare.

It’s not easy to call county after county and meet CONSTANT resistance to your requests, poor communication on the phone, and ridiculous costs for access to things that ought to be freely available online.

How easy is the county's website to work with?

Depending on what markets you're working in, the county website can be a very helpful place to find the information you're looking for.

Start by googling “County Name, State Name” of the area you'd like to work in. Click on the county website and poke around for a while.

• Can you find the Treasurer's, Assessor's, Equalizer's & Recorder's information?
• Can you find the county's GIS mapping system (i.e., does it even exist)?
• Can you find the current and prior ownership information of any property? Sales prices? Legal descriptions? Parcel numbers?
• Can you find current tax information on each parcel (taxes owed, tax paid, etc)?

In my experience, no two counties ever use the same system. Often, the information is there, but it isn't easy to find (and/or it isn't user-friendly) – which can make things a bit more tricky. Nevertheless, if you're serious about working in any particular county, it's worth your time and effort to learn the county's website and figure out what kind of information you do (and don't) have at your disposal.

How easy is the county to communicate with?

This essentially boils down to “human relations” – but it does count for something. Most of the time, you'll get a feel for this if/when you call the County Treasurer (aka – Tax Collector) to order a tax delinquent list.

As you're talking to them on the phone, take note of a few things:

• Do these people sound competent?
• Do they seem to know what they're talking about?
• Are they able to legitimately help you with your request?
• Do they understand what you're asking for, or do they act clueless?
• Do they show a willingness and desire to help you or are they unwilling to give you the time of day?

You'll find the full range of attitudes in the various counties you talk to. It isn't necessarily a “deal killer” when people are difficult to work with, but it can enhance the experience when you're dealing with people who are nice to work with.

When you're just starting out, finding counties that will make things easy can be one of the most difficult obstacles to overcome (and many people quit before they ever get past this initial phase). Sometimes you can get lucky and find a great county on your first try, but many times – you'll have to try at least a few (perhaps several) before you find one that will help you connect the dots.

I hear from many people who encounter SERIOUS fatigue as they try to find the right counties. When you're starting from scratch, it can take a lot of work to figure this out – and the only way to get there is to start trying and keep trying. As you go through this process, remember that with every contact you make, you are learning crucial information about which counties WILL and WON'T be sustainable markets to work in… and the only way to learn this information is to start exploring what's out there and take good notes about which counties make the process easy and which counties make it WAY harder than it needs to be.

9. Data Availability

Many counties make their public property information databases readily available online (or even through a paid data service).

This information is extremely helpful (some might even say it's crucial) when pulling your marketing lists and/or doing property research.

Unfortunately, some counties do an awful job (sometimes even a non-existent job) of making this information available to the general public.

GIS mapping data, delinquent tax data, property ownership information, assessed values, prior sale prices, and comparable values in the surrounding area… it's all part of the overall need for public data. When you can get it, your job as a land investor will be MUCH easier… but when you can't get it (i.e., if one or more of these components is either missing or extremely inconvenient to obtain), your job will become much more difficult.

Now, if you can't get 100% of the data you need, I wouldn't necessarily say a county is a “lost cause”, but at some point, it will get VERY difficult to work in some markets when you can't get easy access to the information you need.

Poor access to data doesn't mean there are no opportunities (if anything, there may be even more opportunities in these areas because the lack of data makes it harder for everyone else to work there), but most of us have to draw the line somewhere and decide how much B.S. we're willing to tolerate in the running of our business. If a county makes the data-gathering process difficult, this is an issue you'll want to factor into your decision.

RELATED: Will Growing Competition Ever Kill The Land Investing Business?

10. State Laws & Regulations

In some ways, these can be some of the trickiest issues to maneuver because even though most state laws are not detrimental to the land investing business, there can be some very random issues and nuances that arise in some parts of the country, and you'll want to steer clear of them. Here are just a few examples…

1. Tax Laws

One day, when researching a potential purchase in Vermont, I learned that this state imposed a land gains tax on anyone who buys and sells vacant land that isn't part of their principal residence.

Essentially, if you flip a parcel of vacant land in a shorter period than seven years, there is a massive tax penalty you'll have to pay. This is the kind of restrictive tax law that (although extremely unique and random) would make it extremely difficult to run a sustainable, profitable land business.

2. Seller Financing

Some states have laws surrounding seller financing that make it much more expensive and time-consuming to repossess a property if/when a buyer defaults on their payments (something I explain in this blog post).

This doesn't necessarily make it impossible to run your business there (because there are usually ways to mitigate these restrictive rules), but if you're planning to rely on seller financing as a big part of your business model, it can be a potential drawback to take into account if you're working in those areas, and you'll want to familiarize yourself with the specifics of how seller financing works in your state of choice.

3. Tax Sale Overages & Excess Proceeds

Collecting excess proceeds (aka – tax sale overages) has never been part of my business (because it's a time-consuming, luck-oriented way to make a profit), but some land investors like to weave this strategy into their overall business model.

Unfortunately, nearly half the states in the U.S. don't allow for the collection of excess proceeds, so if you're planning to apply this strategy to collect an alternative source of income from your properties, this is something you'll want to be aware of, so you can stay OUT of the states where collecting overages isn't even allowed.

4. Title Agencies vs. Closing Attorneys

Many states (particularly on the eastern side of the U.S.) have laws requiring all real estate closings by real estate attorneys rather than title agencies. This essentially doubles the normal cost of closing deals in those states. Case in point…

My title company in Michigan charges a standard closing fee of $500.

My closing attorney in Alabama charges a standard closing fee of $950.

They're both doing the same thing. The difference is that Michigan allows title agencies to close deals, whereas Alabama only allows real estate attorneys to handle closings.

Now, if you're closing on a $100,000 transaction, your profit margin will probably be big enough to cover the slightly higher closing fee – so in many instances, this isn't a deal-killer. However, if you're closing on a deal that costs $1,000… this 2x higher closing fee will become more problematic.

Identifying Issues

Most of the time, it's fairly easy to figure out which states will create obstacles and which won't, but every so often (like in the case of Vermont, mentioned above), identifying these problems isn't always straightforward. When you learn about these issues, take note of them and factor them into the overall viability of running your land investing business in that market.

Most issues won't mean you CAN'T do business, but if you keep encountering problems from several different angles… realize that these issues aren't likely to go away. In most cases, they will consistently be there, working against you and your goals… and if the situation is bad enough, it may be worth looking elsewhere.

RELATED: What Every Investor Needs To Know About Choosing The Right Real Estate Market

Putting it All Together

As you explore more and more counties across the country, you'll eventually learn that some markets are best to avoid. Not because they're impossible to work in, but simply because working in them requires more trouble than they're worth.

I've found that in the end, I don't really “need” more than 6 – 8 solid counties at my disposal. When I finally nailed down which counties would cover me from most (if not all) of the issues listed above, life got MUCH easier because I could continue to work and rework these counties repeatedly.

Keep searching until you find those counties.

In my home state alone, I've attempted to work in approximately 30 different counties. Of those 30 counties, no more than 10 of them were the kinds of counties I wanted to go back and do repeat business in. Granted, if my life depended on it… I could probably make it work in almost all of those 30 counties, but only 10 of them made the process easy and repeatable for me.

RELATED: The Real Estate Investor's Quick Start Action Guide

The Hidden Value of Inconvenience

Lastly, keep in mind – when a county appears to be “difficult” in some way (perhaps you can't get the list in the right format, or the county has a very poor GIS mapping system online)… while this does create some challenges for people like you and me, it creates the same challenges for every other competing real estate investor looking for deals in that market.

RELATED: The #1 Reason Land Investors Fail

Vacant land is known for its overall lack of competition compared to most other real estate investing niches – but when you can find a county that has virtually never been touched (because of its various barriers to entry), the results from even a mediocre marketing effort in these counties can be quite powerful.

Is it hard to work in inherently difficult counties? Of course… but some side benefits come with the territory when nobody else is willing to do the heavy lifting.

The post Finding the Best Markets for Land Investing appeared first on REtipster.

Surely, there must be some secret “sweet spots” that remain undiscovered, right?

Welcome to the world of off-market real estate deals—where the best, biggest fish (or properties) aren’t publicly up for grabs, but if you can find the right people and situations, where sellers have a reason and motivation to sell at a deeply discounted price, you can still find those areas where no one else is looking.

These properties are like the secret gardens of the real estate world: hidden from the public eye and discovered only by those who know where to look or who have been told by those in the know.

Why elbow your way through the real estate crowd when you can dance to your own tune and find the deals others are missing?

If this sounds like your kind of party, I've got 101 tricks to get you there.

Direct Outreach & Visibility

1. Drive for Dollars: Cruise neighborhoods to spot distressed properties. Jot down addresses and send them personalized letters offering to buy.
2. Bandit Signs: Place signs in strategic locations advertising “We Buy Houses.” Ensure you're aware of local regulations about signage.
3. Direct Mail: Send postcards or letters to targeted homeowner lists offering to purchase their property.
4. Door Knocking: Directly approach homeowners. While it's bold, face-to-face interaction can yield genuine connections.
5. Networking: Attend events and join clubs or associations related to real estate. Mingling can lead to unexpected deal referrals.
6. Referrals: Ask friends, family, or professional contacts if they know anyone looking to sell.
7. Local Newspapers: Search for distressed sale ads or place your “looking to buy” ad.
8. Free & Paid Online Marketplaces: Websites like Craigslist or Facebook Marketplace often have properties listed below market value.
9. Social Media: Post regularly about your interest in buying properties; use targeted ads to reach potential sellers.
10. Billboards & Public Advertisements: Rent space to advertise your buying service. A constant presence can make you top-of-mind.
11. Digital Ads: Google and Facebook ads targeting local homeowners can yield leads.
12. Local Radio/TV: Run ads expressing your interest in buying properties. It reaches a broad audience. While you're at it, you could also try streaming online TV ads!
13. Walk the Neighborhood: This gives a casual, more personal approach than driving. Engage locals in conversations about the community and any available properties.
14. Local Festivals: Sponsor or set up a booth. Engage with attendees and spread the word about your buying interest.

Specialized Lists & Databases

15. Wholesalers: Establish relationships with local wholesalers. They are often the most active local real estate investors and can bring deals directly to you for a fee or markup.
16. Public Records: Review public property records for liens, divorces, or other indicators that suggest a potential sale. You can easily check for Lien, Bankruptcy and Divorce Status with a data service like PropStream.
17. Tax Delinquent Lists: Owners owing back taxes are often more motivated to sell at a discounted price, especially if you can make them a cash offer.
18. Eviction Records: Landlords with recent evictions might be tired and considering selling. Most eviction proceedings are a matter of public record. By visiting your local courthouse or accessing its online portal (if available), you can check for recent eviction filings. This will give you a list of property owners who have initiated the eviction process.
19. Expired MLS Listings: Approach sellers whose listings expired without a sale; they might still be eager to sell. In most areas, you'll need MLS access to find this information. If you don't have your own real estate license, you can work with a local agent or broker to help you.
20. Foreclosure Lists: Target homeowners in foreclosure or pre-foreclosure. Offer a solution before the bank takes over.
21. Abandoned Properties: Research ownership through public records and make an offer. You can also find these properties easily with PropStream. Just filter your list by Occupancy Status > Vacant.
22. Vacant House Data Feed: Online services can provide lists of vacant homes in your area. Tools like Property Radar and PropStream are perfect for finding houses where the mail is being returned to the sender.
23. PropTech Platforms: Websites like Mashvisor or BiggerPockets can offer insights or direct listings.
24. Code Violations: Houses with repeated code violations may have owners ready to sell. Code violations are often in the public records. Depending on the jurisdiction, you can access these records online or at the local city or county office. Most cities and municipalities have a building or code enforcement department that keeps track of properties with violations. Some jurisdictions might have this information available online, while for others, you might need to visit in person.
25. Quit Claim Deeds: These can indicate family transfers or problematic properties. Investigate further for potential deals. You can use a data service like DataTree to identify recent transactions with quit claim deeds. Just navigate down to Sale Information > Transaction Deed Type > Quit Claim Deed.
26. Reverse Mortgage Lists: Owners with reverse mortgages might be open to discussions about selling. Many jurisdictions require mortgage transactions, including reverse mortgages, to be recorded in public records. By checking these records, you might identify properties with reverse mortgages. You'll typically be searching for HUD's Home Equity Conversion Mortgages (HECMs), which comprise most reverse mortgages.

Engaging with Professionals & Institutions

27. Local Auctions: Attend and bid on properties. Auctions can sometimes provide properties at below-market values.
28. Banks (including REOs): Contact local banks to inquire about properties they've taken back, known as Real Estate Owned (REO) properties.
29. Bankruptcy Lawyers: Google your local area for bankruptcy attorneys and make connections with them. They often know clients who need to liquidate their assets. You can also find properties with owners going through bankruptcy through websites like Foreclosure.com.
30. Title Companies: They can provide insights on properties with cloudy titles that might be up for grabs soon.
31. Builders & Developers: Sometimes, they're willing to offload properties they purchased that no longer fit their immediate plans.
32. Pension Managers: These professionals are responsible for ensuring pension funds are appropriately invested and generate adequate returns for their members. They often have properties as part of larger portfolios and might sell some occasionally. LinkedIn is a valuable tool for identifying and connecting with pension managers. Use specific keywords related to pension management in your search.
33. Real Estate Agents: A good relationship can lead to first dibs on pocket listings.
34. Home Inspectors: They can tip you off on homes with issues that sellers might want to offload quickly.
35. Divorce Attorneys: Sadly, property sales often accompany separations. Attorneys can be a source of referrals.

Community & Social Engagements

36. Estate Sales: Approach families selling off assets of their deceased loved ones. They might be considering selling the property, too.
37. Local Real Estate Investor Associations: Join and network at your local REIA. Other investors might have overflow or properties they wish to offload.
38. Homeowners Associations: Find and engage board members. They often know about properties in distress or potential sales. Many states and municipalities have organizations or directories that list HOAs. An online search with your state or city name followed by “HOA directory” or “HOA association” can lead you to relevant platforms.
39. Public Speaking: Offer to speak at events on real estate topics. It establishes authority and attracts potential sellers.
40. Libraries: Offer free seminars on real estate topics. Engage with attendees and discuss potential deals.
41. Community Centers: Attend meetings and events. Engage with locals and subtly express interest in buying properties.
42. Historical Societies: Older homes might need too much upkeep for current owners. Websites like the American Association for State and Local History (AASLH) or PreservationDirectory.com list historical societies by state and region.
43. Local Charities: Donate or volunteer. Networking here can also yield unexpected leads. Housing and homelessness charities (e.g., Habitat for Humanity, local homeless shelters, housing coalitions) address housing insecurity or homelessness and often have insights into properties that may be available for sale or at risk of foreclosure.
44. Blogger Outreach: Collaborate with bloggers to write guest posts for them. It's a subtle way to advertise your interest in buying properties.
45. Trade Shows: Attend or exhibit. Network with attendees, gather leads or even find direct opportunities. Real estate investor expos, conferences, and conventions cater specifically to real estate investors. They are prime networking venues where you can connect with other investors, wholesalers, and industry professionals. Some examples are the BiggerPocket Conference, Best Ever Conference, the National Real Estate Investors Association Conference.
46. Home Shows: Similar to trade shows but specific to home products. Owners considering renovations might also consider selling.

Alternative & Niche Opportunities

47. FSBO (For Sale By Owner): Find and engage directly with owners who are avoiding realtors.
48. HUD Homes: Check listings of government-seized properties. They're often listed below market value.
49. Bird Dogs: Hire individuals to scout out potential deals and pay them a finder's fee.
50. Farm & Rural Listings: Sometimes overlooked by urban-focused investors. Rural properties can be slower to sell and may have motivated sellers.
51. Absentee Owners: Identify non-local property owners who might be tired of remotely managing a property. Absentee owners are easy to identify with online research tools like DataTree, PropStream, and Property Radar.
52. Flea Markets: Engage stall owners. Some may have or know of real estate for sale. Some vendors at flea markets are selling items from estate sales. If you come across sellers getting rid of a large number of household items, it might indicate financial distress, which could mean a potential off-market deal opportunity.
53. Utility Companies: Check for homes with long-term service cut-offs, which might indicate an abandoned or sellable property. While utility companies won't typically share specific addresses due to privacy rules, they might share aggregated data or general areas with a high number of service cut-offs. This can be a starting point for your research. In some areas, data related to water shut-offs or delinquencies might be accessible through public records. However, you'll likely need a valid reason for the request, and not all jurisdictions will make this data easily available.
54. Self-Storage Facilities: Owners might be storing after downsizing and could consider selling their former home. Local storage facility owners or managers might be willing to pass along your contact details to their clients. Regularly visit storage facilities, get to know the staff, and express your interest without being pushy. With permission, place flyers, business cards, or ads on bulletin boards in storage facilities. Your advertisement can focus on helping people sell their homes quickly or assisting with downsizing.
55. Residence Halls: Find student housing units within college and university campuses. Due to their close connections with faculty and community, university housing administrators might be privy to upcoming housing sales, especially as faculty retire or relocate. To find them, visit university websites for contact details, offer real estate workshops for staff or network at university events, and always prioritize relationship-building and respect in your interactions.
56. Local Art Galleries and Auction Houses: These venues frequently interact with estate sales, especially when artwork or valuable items are being sold off. The individuals handling these sales might be aware of properties that are being, or soon to be, listed, particularly if the sale of assets is related to downsizing, moving, or settling an estate. Engaging with gallery owners, auctioneers, or staff can provide leads about families or individuals looking to sell properties. Networking at gallery openings, art events, or auctions can be an avenue to establish these connections.
57. Surrounding Property Owners: If a property is of interest, contact neighboring owners. They might be willing to sell or know more about the target property.
58. Outreach to Former Clients: If you've been in business for a while, reach out to past clients. They might be ready for another transaction even if you haven't communicated recently. Especially if they had a good experience with you in the past, they may have an opportunity and would be happy to work with you again!
59. Virtual Assistants: Hire online assistants to scout platforms, listings, and forums for potential leads while you're working the other side of your business.

Engagement with Business & Commerce

60. Bill Collectors: Identify relevant collection agencies, focusing on agencies that handle significant debts, like mortgage companies, banks, or larger financial institutions, as these are more likely to be dealing with individuals who have real estate assets. Due to strict privacy laws like the Fair Debt Collection Practices Act (FDCPA) and regulations that protect consumer information, bill collectors won't divulge specific debtor details. Rather than asking for specific leads, build a relationship, let them know what you offer, and see if they'd be willing to pass along your contact information to those who might benefit.
61. Local Chamber of Commerce: Network with local business owners. They might have leads on commercial or residential properties.
62. Affordable Housing Programs: There are multiple affordable housing programs at the federal and state/local levels in the US (Section 8 Housing Choice Voucher Program, Low-Income Home Energy Assistance Program (LIHEAP), HUD Public Housing Program, etc.). These programs often have online directories where you can find contact details for administrators by state or city. They might know of properties being offloaded or coming up for sale.
63. Funeral Homes: Sensitive but potentially useful. Surviving executors of the deceased's estate might be looking to sell estate properties.
64. Neighbor Referrals: Using data services like DataTree or PropStream, find the contact information of owners in targeted areas, skip trace them to find their phone numbers and email addresses, and contact them to offer incentives for working with you.
65. REO Asset Managers: Engage those managing bank-owned properties. They often want to clear out inventory.
66. Property Management Companies: They might know landlords wanting to sell. You can find local property managers with a simple Google search and by networking at local real estate meetups and association meetings.
67. Small Local Banks and Credit Unions: Engage their property departments for leads on repossessions or unwanted assets.
68. Building Inspectors: Local building inspectors are aware of properties that might be facing code violations or might have structural issues. Owners of these properties might be more motivated to sell rather than deal with repairs or legal issues, especially if they lack the funds or interest to resolve the problems. Building strong relationships with inspectors can give you an advantage in finding these properties before they're widely known.

Online Platforms & Technology

69. Craigslist: Regularly check property listings and also post your own “Want to Buy” ads.
70. Virtual Real Estate Investment Groups & Forums: In the digital age, several online platforms allow real estate investors to discuss, share, and discover off-market deals. Websites like BiggerPockets, real estate sections of Reddit, or even specialized Facebook groups can be a goldmine for potential off-market opportunities. Investors, homeowners, or real estate professionals might often share listings, seek advice, or discuss potential sales before they hit the broader market.
71. Nextdoor: Engage with neighborhood-specific posts or listings.
72. Property Investment Forums: Participate in discussions. Often, members post properties or leads.
73. Mobile Apps for Investors: Platforms like DealMachine allow you to scout and contact owners directly.
74. Online Auction Websites: Websites like Auction.com, Bid4Assets, and even eBay will list properties for sale.

Networking & Personal Connections

75. Alumni Networks: If you attended a university, engage with your fellow alumni. Conversations can lead to property leads.
76. Retirement Homes: Engage administrators or residents at local retirement homes. They might know of properties recently vacated and up for sale.
77. Landlords: Attend landlord meetings or associations. Some might be tired and considering selling.
78. Co-working Spaces: Engage with startups or individuals at co-working spaces near you. They might have leads or direct opportunities.
79. Friends & Family: Always let them know what you do. Personal connections often yield the best referrals.
80. Sporting Clubs & Local Teams: Sponsor local teams and engage with members. Networking here can lead to unexpected opportunities.
81. Meetups or Investor Groups: Whether the local meetups are directly related to real estate or some ancillary interest, find ones you are interested in and attend regularly. Engage with fellow attendees for joint ventures or leads.

Leads through Services & Rentals

82. Rental Listings: Find local rental listings and contact the owner or property manager. Those property owners might be open to selling.
83. AirBnB or VRBO: Find and contract hosts. Some might be considering transitioning out of short-term rentals and selling.
84. Moving Companies: Local movers are aware of who is relocating and might have leads on homes to be sold.
85. Carpet Cleaners or Home Repair Personnel: These professionals are frequently contacted during the transition phase when houses are being bought and sold. They are often aware of homes being prepped for sale.

Local Government & Public Services

86. Planning & Zoning Department: Engage with staff about upcoming zoning changes, which might result in property sales.
87. Post Offices: They're privy to change-of-address forms and might have leads on vacated properties.
88. City Planning Office: Engage on information about future developments or neighborhoods seeing changes.
89. Fire Departments: They can provide information on
90. Public Utility Offices: Engage staff for data on properties with long-term utility non-usage.

Advertisements & Outreach

91. Local Magazines and Newspapers: Place ads to let people know you're looking to buy.
92. Community Newsletters: Sponsor or place ads. Localized outreach can yield great leads.
93. Church or Community Bulletins: Engage and advertise. Community members might approach with leads.
94. Local TV & Radio: Advertise during slots targeting homeowners.
95. SEO & Blogging: Optimize your website to attract sellers searching online for buyers.
96. Google AdWords: Run targeted ads for terms like “sell my house fast.”
97. YouTube Channel: Create content about buying properties. Interested sellers might engage directly.
98. Podcasting: Host or guest on real estate podcasts. Share contact details and buying interests.

Market Research & Analysis

99. MLS Alerts: Set alerts for specific property criteria. This helps in acting fast on potential deals.
100. Local Market Reports: Stay updated. Distressed markets can yield motivated sellers.
101. Property Listing Websites: Websites like Redfin or Trulia can offer insights on potential below-market deals.

Unearthing off-market real estate deals is both an art and a science. While the strategies mentioned above can significantly broaden your horizons, the key to success lies in your consistent effort, building relationships, and always approaching potential deals with integrity and the aim to create win-win scenarios.

Remember, the real estate industry thrives on trust and reputation. By treating each potential seller with respect and transparency, you not only secure a deal today but lay the groundwork for more opportunities in the future. Happy hunting!

The post 101 Ways to Find Off-Market Real Estate Deals in 2024 appeared first on REtipster.

Why?

Because being a landlord is more work than anyone tells you, it’s more passive than working a 9-5 job — but not at all passive like stocks, bonds, REITs, and syndications are passive. I understand why some investors consider passive rental income “a lie.”

RELATED: What Is “Passive Income” Exactly?

The public shares a misconception that landlords live high on the hog, getting rich off the backs of working people, all without lifting a finger. Every single component of that cultural belief is false.

Still, it begs the question: What work is required for rental properties? What costs landlords time?

Buying and managing rental properties may not require you to clock into a job at the same time every day, but it still requires plenty of work from start to finish. Keep the following tasks in mind before buying a rental property.

Finding Deals

As an investor memorably told me once:

“There’s no deal tree that you can just walk up to and pluck good deals.”

The MLS, as an open market, is—by definition—where you pay market pricing for properties. And market pricing for rental properties tends to leave slim cash flow margins.

This is just like the MLS, just less glamorous and aesthetically pleasing.

That doesn’t mean you can’t find good deals on the MLS. But even that requires work: scouring dozens of properties, perhaps visiting them in person, making offers, negotiating deep discounts, you name it.

The best deals aren’t found there at all, but rather on off-market properties where you aren’t competing and bidding against every other investor. These include “abandoned” properties, pre-foreclosure or other distressed properties, probate properties, and the like.

Reaching out to these owners costs labor and money. It takes effort and funds to identify them, to contact them via direct mail, text, or voicemail campaigns, and to screen leads as they come in.

In contrast, you can just buy shares in an index fund mirroring the S&P 500 and call it a day.

Funding Deals

You just spent 100 hours evaluating 80 potential deals, made 40 offers, and signed one contract of sale. Congratulations! Now you need hundreds of thousands of dollars actually to buy the property at closing.

If you have it lying around in a checking account somewhere, great. Most of us don’t, however, so we have to go out and line up financing.

Again, that takes hours of work—work to network with lenders, work to comparison-shop interest rates and fees for this specific loan, work to submit an application, and all the subsequent paperwork the lender demands.

The good news is that it gets easier. As you build relationships with portfolio lenders, they become easier to work with. They close faster, ask for less paperwork, and offer you their best possible rates with no haggling. But in the beginning, you start from scratch with them.

Initial Repairs

It’s possible to buy turnkey properties, either with tenants already in place or ready to be rented. But in my experience, few “turnkey” properties are in 100% perfect condition, and those that are sell at a premium.

No, in most cases, if you want any kind of bargain, you’re looking at properties that need at least some cosmetic updates, and possibly a full renovation. Read: more work.

Managing Contractors

You may not be swinging the hammer yourself on your nights and weekends, but you’ll still incur plenty of labor time. It takes time to get quotes from contractors, negotiate with them, oversee their work, demand high quality from them, and keep them on the promised timetable.

I have found contractors to be consistently difficult to work with, and it’s an experience I’ve heard reflected from other real estate investors time and time again. Managing contractors is one of those hidden challenges that no one expects when they get into real estate. It’s neither fun nor easy, and it’ll cost you time and money to learn the skills needed to manage contractors effectively.

Hiring a general contractor helps—and it adds to your costs. The pricier the contractors, the more professional they tend to be, both in their work quality and in their ability to do basic things like show up on time for appointments and keep a timetable. But if you’re paying retail prices for high-end contractors, you can expect a harder time keeping your budget.

Permits and Inspections

If you make any improvements beyond cosmetic ones, you need to file (and pay) for permits. Your contractor can potentially do this for you, but they’ll charge you a premium for it.

Filing is the easy part. When the work is complete, you have to schedule an inspection, and inspectors are not the easiest or most professional people to work with. I’ve known many inspectors to fail every property the first time they look at it, simply to prove to their supervisors that they’re making their rounds and “enforcing the law.”

In fact, I’ve known some inspectors who fail properties without a bribe.

Consider yourself warned.

Filling Vacancies

Once you get your Use & Occupancy permit, you’re free to advertise the property for rent.

And then show the property to prospective tenants, review rental applications as they come in, run tenant screening reports, call up landlord references and employers, draft and sign a lease agreement, and collect the security deposit and first month’s rent.

All while maintaining a written standard for which applications you’ll accept and keeping records of all applications. You do all this so you can prove you didn’t discriminate if a disgruntled applicant sues you because you chose someone else over them. More on lawsuits later.

How passive does all that sound?

Managing Tenants

Once you sign a lease, you don’t just sit back and watch your bank account grow. While more passive than the previous efforts required of you, you still incur some ongoing work.

Collecting Rents

Maybe you pay your rent or mortgage on time every month. I do (or did, back when I paid for housing), and I initially assumed everyone just paid their bills as the standard course of business.

Wow, was I wrong.

Some people never saw a bill they wanted to pay on time. They wait until someone chases them before they pay it.

Others might pay on time for a little while, then lose their job or get a divorce, or their car breaks down. Most landlords don’t report rents to the credit bureaus, and it’s the largest bill for most renters, making it an easy first choice for delaying payment.

So you have to send late notices, then official eviction notices, then file in court for eviction, then show up in court to the eviction hearing, then schedule a put-out date, AND then show up for it.

Enforcing Your Lease

Nothing makes you more jaded than watching people abuse your empathy.

I’ve heard every sob story in the book from tenants asking me to hold off “just one more week” from filing an eviction. In my early years as a landlord, I thought I was being a “good landlord” by offering extension after extension.

I eventually learned that it’s human nature to push boundaries, and it’s your job as a landlord to defend your boundaries as laid out in your lease. Some renters simply made up stories, others had no clear plan or budget for getting caught up. Few ever caught up on rent without me forcing their hand by filing for eviction.

And that doesn’t just go for unpaid rent. Tenants can break your rental agreement in other ways, from bringing in unauthorized occupants or pets to damaging your property to committing crimes in it.

It falls to you to enforce the two-way legal contract you signed with your renters. It’s often uncomfortable and is never fun. But it’s what you sign up for when you become a landlord.

Regular Inspections and Maintenance

How do you discover when a tenant has violated your lease?

By visiting the property regularly, of course. Which, in turn, requires work on your part.

I recommend visiting each rental unit every six months at least. It sends a clear message to the renter that you care about the property, that you’re paying attention, and that you’re not an absentee landlord.

Inspections aren’t just to look for lease infractions—it provides you a chance to look for maintenance issues that need attention. To catch problems in their infancy, before they become expensive.

Because real estate is, well, real. Buildings are physical objects that experience wear and tear, that deteriorate over time, that become outdated. They require ongoing upkeep and maintenance, which means (joy!) more working with contractors.

Inspections also give you a chance to check in with renters about their plans for renewing their lease and gauge whether you can retain them by making a requested property improvement.

Bookkeeping and Additional Accounting

I remember how simple my tax return used to be when I was a W-2 employee with no rental properties. It took me about an hour to prepare my own tax return.

Rental properties add complexity to your tax return. You have to sum up all income and expenses accurately and put them in the right places on your Schedule E. That includes depreciation, by the way—Uncle Sam will charge you depreciation recapture when you sell the property, whether you actually deducted for depreciation or not while you owned the property. I learned that nasty tax lesson the hard way.

I eventually gave up and hired an accountant to prepare my taxes for me. That added to my personal expenses each year.

But the accountant won’t keep accurate records of your income and expenses for you. You need to keep your own books, including expenses ranging from repairs to utilities to travel to insurance to mortgage interest and more.

If you don’t keep your books accurately, the best-case scenario is you pay more taxes than you should have. The worst case scenario is an IRS audit, and if you thought the rest of being a landlord is a lot of work, wait until you suffer through an audit.

Fending Off Lawsuits

People love to sue landlords.

Some of that stems from our aforementioned cultural hatred of landlords. But it also stems from the fact that landlords have at least one valuable asset that litigators know about: the property itself.

You can’t move or hide an investment property. If a tenant with a silver-tongued attorney sues you, they know they can eventually collect the judgment from you because it attaches as a lien against the property.

It’s also why cities often make landlords liable for their renters’ actions: they know they can collect from landlords, but it’s much harder to collect from tenants.

I’ve been sued as a landlord. It’s stressful, time-consuming, and expensive. And it cost me plenty of hours of sleep to boot.

What About Hiring a Property Manager?

If you yawned your way through all the work outlined above, shrugging it off with “I’ll just hire a property manager,” think again.

Sure, a property manager can take on some of the headaches for you. They show the property, review rental applications and screening reports, and show up in court for you for eviction hearings.

But when you delegate these tasks to a property management firm, you have to then manage the manager. You have to confirm they screened the tenants well, that they’re actually inspecting the property (thoroughly) every six months, and they’re getting the best value for you on repairs and maintenance. For that matter, you also have to watch out that they aren't charging you hidden fees and collecting kickbacks from contractors.

Managing the property manager is a recursive problem, similar to Juvenal's timeless epigram, “Who watches the watchmen?” (Quinn Dombrowski from Berkeley, USA, CC BY-SA 2.0, via Wikimedia Commons)

My experiences with property managers have been just as fraught as those with contractors. Property managers love to bury fees in their legal contract, such as fees for renewing leases with existing tenants, changing the locks, visiting the property, or hiring contractors to do, well, anything. Then they bury those fees in complex monthly statements.

Do honest, effective, and professional property managers exist? Certainly. But it’s an industry rife with mediocre and/or unscrupulous operators, and it usually takes plenty of effort on your part to screen, hire, and manage the best property managers.

Final Thoughts: Higher Hidden Costs on Lower-End Properties

I’ve found that the lower-end the rental property, the worse the hidden costs, both financial and to your time.

For example, the best property managers don’t work with low-end properties. Low-rent properties come with twice the work at half the commission. That leaves you with the dregs of property management options in your area.

Likewise, I’ve found higher default, eviction, and turnover rates at lower-end properties. All of which are where the bulk of landlords’ financial and time costs lie, as opposed to renters who just pay on time each month.

Lower-end renters tend to cause more abuse to the property, which in turn means more repairs and maintenance.

These have been my own experiences, and those of every other real estate investor I’ve ever spoken with on the subject. If you find me sharing these experiences offensive, by all means, go out and buy up every low-end rental property you can afford. Someone has to, and I’m just glad it’s not me anymore.

The post The Hidden Costs of Being a Landlord: Debunking the Passive Income Myth appeared first on REtipster.

But as in most industries, the barriers disappear once you learn a few dozen terms and abbreviations. What sounds like a foreign language contains just a few new vocabulary words.

In fact, the terminology is the easy part. Finding great deals on properties or managing contractors? That’s the hard part.

54 Real Estate Abbreviations for Investors

As you learn the language of real estate investing, keep an eye out for these common real estate abbreviations.

1. ARV

After-repair value, or ARV, refers to a property's (drum roll please…) value after repairs are completed.

House flippers, in particular, use ARV to calculate the potential profit on a flip.

2. BPO

A broker price opinion is a report prepared by a real estate broker or agent, estimating a property’s value. It’s less comprehensive—and less expensive—than a full property appraisal.

3. Cap Rate

A property’s capitalization rate or cap rate is the ratio between its income and its value or price. Specifically, it’s net operating income (NOI) divided by the cost or value.

It offers one of many ways of calculating the return on an income property. A cash buyer for a $100,000 property that nets $8,000 per year would earn an 8% cap rate on the property. Buyers willing to accept lower cap rates pay more money for the same property.

Or play around with our cap rate calculator to get a better sense of how cap rates work.

4. CCIM

The National Association of REALTORS® (NAR) offers the certified commercial investment member designation to Realtors who specialize in working with commercial real estate and investment properties.

5. CC&R

In planned communities and homeowners associations, the term “covenants, conditions, and restrictions,” or CC&R for short, refers to the governing rules in that community. Read them before buying, because you’re stuck with them once you purchase a property.

6. CMA

Real estate agents perform a comparative market analysis, also known as a competitive market analysis, to inform sellers about the market value of their property. It features comparable homes (“comps”) that have sold recently.

A screenshot of “comps” using Zillow.

7. CoC/CCR

Cash-on-cash return refers to the annual income yield you earn on your personal cash invested in a property or fund.

For example, if you invested $50,000 as a down payment on a property that nets $5,000 annually, you’d earn a 10% cash-on-cash return. The same calculation applies to real estate syndication investments: CoC refers to the income yield you earn on your cash investment.

Try our cash-on-cash return calculator to get more comfortable with the concept.

8. COF

Most commonly used by lenders, cost of funds (COF) reflects their cost to acquire the money they need to fund loans. If you invest in private notes, for example, and you can borrow money at 5% and lend it at 10%, then your COF is 5%.

9. Comp

A comparable property or comp is precisely like it sounds: a similar property very close to the property that has recently been sold or rented. You use comps for market research and determine a property's value or market rent.

The perfect comp would be an identical property right next door that sold yesterday. Obviously, that almost never happens, but the more similar and closer the property, and the more recent the sale or leasing, the better the comp.

Also see CMA above.

10. COO

A certificate of occupancy (COO) documents that a property is rented out and physically occupied.

11. CPM

Another designation by the National Association of Realtors, a certified property manager (CPM) has completed the licensing required by the NAR.

12. CRE

Commercial real estate. ‘Nuff said.

13. DSCR

Debt service coverage ratio or DSCR is a calculation used to measure an income property’s cash flow. Simply divide the property’s annual net operating income (NOI) by the annual cost of its debt service (principal and interest). For example, a property that generates $12,500 in net annual income and costs $10,000 in debt payments has a DSCR of 1.25.

14. FHA

You probably already know the Federal Housing Administration—they’re known for their famous FHA mortgage program requiring just 3.5% down for borrowers with credit scores above 580.

15. FMR

“FMR” stands for fair market rent, for people too lazy to write “market rent.”

16. FMV

Likewise: fair market value, or a property’s estimated market value.

17. Fannie Mae (FNMA) and Freddie Mac (FHLMC)

Fannie Mae and Freddie Mac are two quasi-governmental lending institutions that issue standardized mortgage loan programs, buy loans that conform to those programs, and then bundle and sell them as mortgage-backed securities on the secondary market. If you’ve ever heard the term “conforming loan,” it refers to loans that meet these loan program rules.

18. FSBO

You probably know this one too: for sale by owner. For sale by owner (FSBO) refers to property whose owner is selling it directly without the assistance of a real estate agent or broker. In an FSBO, the owner assumes the responsibilities typically handled by a real estate agent.

19. Ginnie Mae (GNMA)

Ginnie Mae operates similarly to Fannie Mae and Freddie Mac, with a few differences. It’s owned by the federal government and guarantees loans but doesn’t buy them. Read more about Ginnie Mae here if you just can’t live without understanding all the differences and similarities.

20. GP

A general partner or GP on a real estate syndication is the primary investor who found the deal and will oversee acquisition, renovation, property management, and eventual sale. Read more about the legal structure of a general partnership for more details.

21. GRM

Gross rent multiplier (GRM) helps investors compare at a glance the ratio of a property’s gross rent versus its price or value. You calculate GRM by dividing the price by the gross annual rental income. For example, a property that sells for $150,000 and generates $15,000 in gross annual rents has a GRM of 10.

22. HELOC

A home equity line of credit (HELOC) is a rotating line of credit secured against your home with a lien. You can also take out lines of credit against a rental property, but it’s not called a HELOC, because it’s not secured by your home/primary residence.

23. HML

In real estate investor-speak, an HML refers to either a hard money lender or hard money loan, depending on the context. These private loans stay with a single lender rather than bundled and sold on the secondary market like conventional mortgages.

24. HOA

A homeowners association (HOA) is a community-run organization that manages common property and provides services for its members, who are residents of the community.

25. HUD

The Department of Housing and Urban Development, or HUD, is the bureaucratic agency in the federal government that oversees all things housing-related.

26. HVAC

Short for heating, vacuum, and air conditioning, HVAC can refer to either these mechanical systems in a property or a contractor who specializes in repairing them.

27. IRR

New investors find internal rate of return (IRR) one of the more confusing concepts in real estate—largely because the formula is so complex—but it’s not as scary as it sounds. IRR refers to the annualized return that an investment delivered, if you adjust for compounding.

For example, imagine you buy a property, break even on cash flow for two years, then sell it for a 40% profit. The average annual return is 20%: 40% divided by two. But if you had actually earned 20% in the first year and were able to reinvest that extra money, you’d have earned a higher return in the second year, right? Taking into account the compound returns you would have earned if you’d collected those returns along the way, the IRR in this example would be 18.32%.

28. JV

No, it doesn’t stand for junior varsity. In real estate investing, JV refers to a joint venture, where two or more investors go in on a project together. That project could be a property investment, or it could be a marketing initiative, or something else.

29. LLC

A limited liability company or LLC is a simple legal entity many investors use to buy and own investment properties. If you want to start your own, Seth shows how in the video below.

30. L/O

A lease option agreement offers the renter the right to buy the leased property at a specified price.

31. LOC

Property owners can take out a line of credit against their investment properties, not just against their homes.

32. LP

A limited partner or LP invests passively in a real estate syndication or fund. In other words, they act as a “silent partner” investing money only and don’t take on any labor or responsibilities. They’re also protected from legal liability and can’t be named personally as a defendant in a lawsuit.

Read more about the legal structure of a limited partnership here.

33. LTC

Loan-to-cost ratio or LTC refers to the ratio of a project’s debt over its total costs. It’s often used for construction or heavy renovation projects. If a project will cost you $1 million and you can borrow $800,000, it has an LTC of 80%.

34. LTV

The corollary to LTC, the loan-to-value ratio is the percentage of a property’s value that you can borrow. For example, if you borrow $150,000 to buy a rental property worth $200,000, you borrow at 75% LTV.

35. MLS

Real estate agents use the multiple listing service or MLS as an open marketplace platform for listing properties for sale. Read more about how the MLS works here.

36. NNN

A triple net or NNN lease leaves the renter responsible for property taxes, property insurance, and repairs and maintenance. It’s commonly used in commercial real estate but not residential real estate.

37. NOI

Net operating income or NOI refers to the annual net income that a property produces after accounting for ownership expenses (but not debt service).

For example, say a property rents for $1,000, but comes with $500 in monthly expenses, not including the mortgage payment. It generates an annual gross income of $12,000, but the NOI is only $6,000.

38. NOO / OO

Real estate professionals sometimes specify whether a property is owner-occupied (OO) or non-owner-occupied (NOO). For instance, Realtors might tout that until recently being vacated, a property was OO for the last 20 years. Alternatively, hard money lenders might state “NOO only” to describe their loan eligibility.

39. O/F

The real estate abbreviation “O/F” stands for owner financing (also called seller financing). In a real estate listing, it indicates the seller will consider offering it for qualified buyers.

Here's how seller financing can work to your advantage and practically set off a chain reaction in land investing, as explained by Eddie Speed:

40. PITI/PITIA

In the context of mortgage financing, PITI stands for principal, interest, property taxes, and insurance.

Many lenders offer a cheaper interest rate for borrowers who agree to let the lender escrow and collect funds in each monthly payment for property taxes and insurance. The association fees are often included for a property belonging to a homeowners association or condo association, adding an “A” for PITIA.

41. PMI

Private mortgage insurance or PMI protects the lender if you default on your loan and they take a loss. Conforming loans typically require it if you borrow more than 80% of the property’s value. They typically allow you to drop it once you pay your loan below 80% LTV.

Note that FHA loans come with their own mortgage insurance requirements under the moniker of mortgage insurance premium (MIP). Unlike conforming loans, FHA loans now require you to keep paying for MIP for the entire life of the loan, even after you pay the loan balance below 80%.

42. POA

A power of attorney (POA) lets you authorize another person to act on your behalf in legal matters. For example, a hospitalized property owner might sign a power of attorney authorizing their adult child to review and accept purchase offers for a property and sign at the settlement table.

43. Pref

The preferred return or “pref” on a real estate syndication deal or fund sets a certain return percentage that LPs are entitled to before the GP starts collecting their portion of returns. For instance, a 7% pref means that passive LP investors have rights to the first 7% of returns that a deal generates each year before the GP takes any profits.

44. Promote

The “promote,” on the other hand, is a percentage of a syndication’s profits that the GP earns to compensate them for their labor, aside from the returns on any of their own money they invested. In an 80/20 profit split, financial investors (including LPs) are entitled to their proportion of 80% of the deal’s profits—but 20% gets skimmed off the top to compensate the GP.

45. PUD

Homeowners get access to shared community features in a planned urban development or PUD. However, they must also pay homeowners association fees for that right; participation is mandatory.

46. REIA

A real estate investors’ association or REIA is a private networking group of local investors. They meet regularly (such as monthly) to discuss market trends, share information, network, and otherwise help each other succeed in what can otherwise be a lonely business.

47. REIT

As a passive investment in real estate, you can buy shares in a REIT or real estate investment trust. These companies must hold at least 75% of their assets in real estate (or loans secured by real property), earn at least 75% of their income from real estate, and payout at least 90% of their net profits each year to investors in the form of dividends, among other requirements.

Traditionally, investors bought and sold REIT shares like stocks through their investment brokerage accounts. Today, investors can also buy shares in private REITs directly from real estate crowdfunding platforms as well.

48. REO

When mortgage lenders take back properties at foreclosure auctions, they refer to them as real estate-owned or REO properties. In most cases, lenders aim to sell REO properties quickly to get them off their books.

49. ROI

Return on investment, or ROI, refers to (you guessed it) the financial return you earn on an investment. Imagine you have $200,000 of total costs wrapped up in a house flip, and you sell the property for $250,000—you earn a return of 25% ($50,000 profit divided by $200,000 invested).

50. RTO

Rent-to-own homes allow the tenant to buy the property, often with a portion of their rent going toward their eventual down payment.

51. SDIRA

A self-directed IRA (individual retirement account) lets you invest in almost anything you want. Real estate investors particularly like them as a tax-advantaged way to invest. Read more about SDIRAs to fully understand their limitations and rules.

An IRA, whether self-directed or otherwise, is one of the best ways to get started in the land investing game. If you've got some cash sitting in the bank, do these nine money moves now to put your foot in the door.

52. TLC

When a real estate listing says the property “needs TLC,” they mean it needs updating or renovations. The acronym TLC stands for tender loving care.

53. VA

A virtual assistant works remotely for a relatively affordable wage, taking on any tasks you give them. Read up on how to use VAs to streamline your real estate investing business for ideas.

54. VA Loan

The Department of Veterans Affairs (VA) offers one of the best mortgage programs for military servicemembers and their families. The VA loan program famously lets some borrowers put 0% down on a home purchase.

Final Thoughts

Don’t be intimidated by real estate abbreviations and lingo. The concepts are usually simple, and you don’t need a math degree for real estate calculations, either.

In fact, that’s one of the most significant advantages to real estate: anyone can master the basics and reproduce others’ success. Take the time to learn the fundamentals, and never pass on a chance to learn from investors with more experience than you have.

The post 54 Abbreviations Every Real Estate Investor Should Know appeared first on REtipster.

Interestingly, real estate income has consistently outperformed inflation over the past two and a half decades, so property is still a safe asset. Nevertheless, you need to know how to make every penny count when it comes to investing when the economy is experiencing inflation.

Before we go to the how, let's discuss the what—the impact of rising prices and how you can leverage them for investing in real estate during inflation.

Understanding the impact of inflation on real estate

To make informed choices about investing in real estate during inflation, it's essential to understand the market's behavior in such economic conditions.

Inflation's effect on purchasing power

Inflation means an increase in the price of goods and services over time, so each unit of currency buys you less than it did previously. In other words, inflation reduces the purchasing power of the same amount of money over time.

To combat the rate of inflation, a country's central bank (such as the U.S. Federal Reserve or the U.K.'s Bank of England) typically increase interest rates, which affects all kinds of debt, including mortgages. This means fewer buyers have access to financing, which can make it harder to borrow to invest in real estate.

Inflation's effect on development power

In inflationary environments, property construction becomes more expensive. The cost of land, materials, machinery, and wages all increase, which discourages development. When a property does get built, it’s more expensive as the construction costs are passed on to the buyer.

There’s also more demand for existing buildings, so the overall cost of real estate rises, especially in areas with growing populations.

Rental income and inflation

A spike in interest rates means many potential buyers are priced out of purchasing a property. This makes rentals, whether residential or commercial, a great real estate investment.

Be aware that there’s less demand for vacation rentals when people face a higher cost of living. Retirement property also takes a downturn as more people choose to stay in their current homes until the economy recovers.

Source: “Real Estate's Lead as Best Investment Shrinks; Gold Rises,” Gallup

Appreciation and inflation

In real estate, the appreciation rate is the increase in the value of a property over time. This is based on market demand—the higher the demand, the more property is worth (especially when there are fewer new developments).

Although higher mortgage rates can slow down housing markets, property prices are still expected to increase over time. Appreciation is one reason why real estate assets can be a hedge against inflation.

RELATED: Got $100K to Invest in Real Estate? Do These 9 Things

8 strategies for real estate investment during inflation

With all that said, how exactly can you capitalize on inflation as a real estate investor?

Try these eight ways:

1. Focus on cash-flowing properties

It’s a good idea to focus on properties that will generate a high cash flow. Rentals give you a steady stream of income and perform well during inflation. Consider multi-family homes as well as commercial real estate.

You have the option to increase your cash flow by setting higher rental prices. These properties also tend to maintain their value over time. To do this successfully, it’s important to keep an eye on your cash flow using accountancy tools and software.

Generally, these tools will ensure you have control over your investment budget, but you can also take it one step further and look into specialized software. More specialized tools, such as property accounting software, are designed with real estate in mind. They're also location-specific, which can help you with applicable property taxes, whether you're in the U.S., U.K., or elsewhere.

2. Consider fixed-rate financing

Inflation can go up or down in the future, so it makes sense to lock in a fixed interest rate for the money you borrow. This rate will apply for the entire agreed term, no matter how much the Fed hikes interest rates.

You’ll benefit from property appreciation while your borrowing expenses remain the same. The initial price may be higher than for a floating rate because the lender is taking more risk. Nonetheless, you’ll find it much easier to forecast your expenses.

3. Diversify your real estate portfolio

In an uncertain economic climate, the last thing you want to do is put all your (real estate) eggs in one basket. If you only invest in one type of property, and there’s then a downturn in that market, you’ll lose out. It’s better to choose a mix of different sectors and assets to spread your risk—a practice known as diversification.

For example, you can build a portfolio consisting of both residential and commercial properties, as well as a couple of vacation rentals. Buying property in different locations is also a clever way to hedge your bets.

This is especially true if you have the ability to buy in different countries that may not be suffering the same rates of inflation and may have more favorable market circumstances. However, do your due diligence by researching their tax and legislation requirements thoroughly.

4. Invest in real assets (and development opportunities)

Before you part with any money, make sure the property will be a worthwhile investment. For instance, you can look for properties with great potential and renovate them before selling them for a profit, known as a “fix-and-flip.” If you're short on the funds or have no idea where to start with this, read our guide on how to flip properties with little to no money.

Alternatively, you can seek development opportunities by buying a suitable plot of land, adding value, or holding on to it until there’s a better climate for house building. Developing or remodeling a house can be a great opportunity or side-project if you have any DIY or construction background, as you’ll likely generate a larger profit and have greater control over the project.

That said, be aware that developing a property will likely involve investing much time and attention. So it can be worth investing in tools, like construction industry accounting software, to help you to monitor your finances and take care of important details, such as tax compliance requirements in your property's location, whether it's in Los Angeles or London.

RELATED: What’s the Easiest Way to Invest in Real Estate Long-Distance? 9 Options Ranked by Difficulty

5. Plan for property appreciation

If you invest right now, you’ll see the maximum benefit from rising housing prices before the market starts to cool. You can also consider adding value by renovating your properties and charging more in rent or resale.

Inflation makes your property worth more and gives you passive equity, but if interest rates do fall, a cash-out refinance may be a good idea.

6. Factor inflation into rental rates

If you’ve paid a higher price to purchase a new property, you can offset it by charging more in rent. If you’ve owned rentals for a while, you can increase the rent in line with inflation to cover your own cost of living. Just be careful to set a fair price for the market.

You should make sure you invest in a type of real estate that’s in high demand in your chosen area to make it easier to find tenants.

Free to use image sourced from freepik.com

7. Consider shorter lease terms

If you go for a short-term lease, you can reprice your rent more quickly. Short-term rentals or STRs are often vacation properties, but they don’t have to be—people may need somewhere to stay during home renovations or in the gap between selling and buying a home.

The advantage is that you typically get paid upfront at the time of reservation, and your expenses are tax-deductible. You can always convert an STR into a long-term rental later if you want to.

RELATED: 6 Steps to Turn Your Airbnb Side Hustle Into a Thriving Full-Time Business

8. Monitor economic indicators

Finally, it’s important to keep a close eye on the state of the economy that you intend to invest in, both before you invest and in the future. Forecasting is not an exact science, but staying aware of emerging trends, market differences, and opportunities is still a good idea. Keep an eye on slowing growth in certain sectors, and look for signs of an economic downturn.

Final Thoughts

Provided you understand the impact of inflation on buying power, construction, rental income, and appreciation, real estate can be an excellent investment as prices rise. Property tends to retain its value and generate a steady income, and it’s less affected by economic instability than other investments like stocks.

Follow the tips above, and you can make smart investments in real estate during inflationary periods.

The post 8 Strategies for Real Estate Investing During Inflation appeared first on REtipster.

In fact, real estate offers the perfect breeding ground for scams, given the high dollar values involved.

As you navigate real estate transactions as a buyer, seller, investor, or renter, watch for the following real estate scams.

1. Foreign Buyer Scam

A variation on a classic check scam, a foreign or long-distance buyer offers to buy your property, often in cash. They can’t meet with you in person because they live far away, but they put down a deposit to buy your home.

You receive a check—often an official-looking cashier’s check—for more than the agreed-upon amount. The buyer apologizes and instructs you to deposit it and send them a partial refund for the overage. You do so, only to then have their check bounced.

How to Protect Yourself

First, work with reputable local real estate agents or attorneys. But even if you’d rather sell FSBO, watch out for sketchy buyers who refuse to meet in person or send a licensed representative, such as their Realtor, to see the property and oversee the transaction.

Bill Gassett of Maximum Real Estate Exposure, a thirty-seven-year real estate veteran, suggests never doing business with someone you’ve never met in person and especially a stranger from a foreign country. “With a purchase as significant as buying real estate, a buyer (or their credentialed representative) should have no issues meeting face-to-face. If they balk at that suggestion, red flags should go up immediately,” he advises.

Most of all, never send a stranger money for a “refund.” Even if the check appears to clear, the sender can sometimes claw back the money later.

2. Fake Realtor Scam

In a fake real estate agent scam, the scammer contacts you claiming to be your Realtor or someone from their office. They use your Realtor’s email address (or one that looks similar to it), or they call you, claiming to be the Realtor's assistant or associate.

Once they’ve established these fake bona fides, they give you the wrong bank account information for transferring an earnest money deposit (EMD). You wire the money, only to discover that your actual agent or title company never received it.

How to Protect Yourself

When you take down payment account information, do it by phone or in person with your real estate agent. If you must take it by email, take it as part of an existing email thread that you know is with your actual Realtor.

3. Fake Escrow Scam

This one works similarly to the fake real estate agent scam, but with the scammer pretending to contact you from the title company or settlement attorney.

They may even go so far as to have a website and phone answering service that look or sound similar to the real title agent’s website or phone system. The phone number or address might be off by a single digit.

The person claiming to work for the title company gives you fake wire instructions for sending in your escrow or settlement funds. You then show up for the real settlement, only for the true settlement agent to ask where your funds are.

How to Protect Yourself

Contact the title company based on the phone number listed in your original loan documents to confirm the funding instructions.

If you receive an email or other communication informing you that the funding instructions have changed, double check it with your existing contact at the title company.

4. Fake Competing Offers

While not criminal fraud like the scams outlined above, lying Realtors still pose a problem.

When you express interest in a property, unscrupulous listing agents sometimes tell you all about how much interest they’ve received in the property, how multiple offers are coming in hot, how the property may not be available “after tomorrow when the buyer compares offers,” and so on.

It’s sometimes true. And it’s sometimes a complete fabrication to spur a hasty and higher offer from you.

How to Protect Yourself

Unfortunately, there’s little way to know just how much competing interest there is from other prospective buyers.

All you can do is stick to your guns and don’t let yourself be oversold by a fast-talking agent. Make the same offer regardless of how much buzz the listing agent tries to spin up, and negotiate based on what the property is worth to you.

“Ignore the hype from the listing agent and create leverage in your negotiations with a real estate comps analysis,” recommends Ramonelle Lyerla of Mashvisor. (Side note: check out our full Mashvisor review here.)

5. Bait-and-Switch Listings

You know the old bait-and-switch trick, but it can cost you thousands of dollars in an industry with assets worth hundreds of thousands.

In real estate, it works like this: You find a property listed for sale or rent, at an excellent price. When you reach out to the listing agent, they tell you that the property has already been sold or rented, but they have some outstanding other properties available.

Then they take you on a spirited romp across town, showing you one overpriced mediocrity after another.

How to Protect Yourself

One option is hiring your own buyer’s agent or renter representative. They can find good deals for you and negotiate on your behalf.

Even if you don’t take that route, insist on the listing agent sending you all listings in advance before you waste time traipsing all over the city.

6. Bait-and-Switch Movers

Sadly, the moving industry isn’t known for its scruples. In fact, it’s so rife with bad actors that two of the biggest names in the industry, United Van Lines and Mayflower, launched a service called MoveRescue to help residents avoid problems.

Many movers agree to one price verbally, then once they start loading your belongings, insist on a higher price. “Hmm, this furniture is a lot heavier than we thought. I’m afraid it’s going to cost more than we originally discussed.”

In extreme cases, they hold your belongings hostage. Or they insinuate that your items are fragile, and they’re not responsible for any damage if they unload it back into your home after you “wasted their time.”

How to Protect Yourself

Bribe your friends and family members with pizza and beer to help you move?

If you’d rather hire a moving company, get a referral from someone you trust. Get several quotes, and insist on all of them in writing. If a mover seems reluctant to commit to a written contract, skip them and find someone else. You can also check movers’ profiles on the Better Business Bureau website, which has over 20,000 moving companies listed.

7. Fake Landlord Scam

Renters, especially those moving long-distance, sometimes have to rent a home sight-unseen. That leaves them vulnerable to scammers pretending to own or manage a property, but in fact have no affiliation with it.

The fraudster lists a property for rent at an appealing price—often too good to be true—and then when you contact them, they impress upon you how much interest they’ve received about this property (see the “fake competing offers” scam above). They then offer to hold the property for you if you put down a security deposit, first month’s rent, and/or holding deposit.

All sight-unseen.

You transfer them the money, and they disappear. When you get desperate enough to look up the actual owner or property management company, they don’t know what you’re talking about.

How to Protect Yourself

First, always either see the property yourself or send a representative to see it. It’s harder (but not impossible) for scammers to gain access to the property to show it to you.

Second, verify the ownership of the property and the property manager’s role. That’s easier in the case of large apartment buildings, where you can look up the manager online and contact them independently. You can always hire a Realtor as well to represent you and have them verify the owner or property manager.

Finally, make sure you report these and any other real estate fraud to the police. “Many people hesitate to report being scammed for fear of embarrassment or simply wanting the whole ordeal to go away,” explains Sallie McBrien of Your At Home Team. “But not reporting the incident to authorities only enables the bad actors to continue scamming innocent people. If you are scammed out of money during a real estate transaction, please contact your financial institution and the proper authorities to handle the situation.”

8. Predatory Refinance Lenders

I spent the first five years of my career working for a mortgage lender, and there’s a reason why they love refinancing borrowers so much. Several reasons, in fact.

To begin with, they get to charge you a whole new set of lender fees. These include loan points, but also “junk fees”—flat fees that they literally make up to charge as much as they think they can get away with. “Processing fee,” “underwriting fee,” “document preparation fee,” “wire transfer fee,” and “document recordation fee” are just a few examples.

The other incentive is more subtle. At the beginning of your loan, most of your monthly payment goes toward lender interest. As time goes by, the proportion of each monthly payment that goes toward interest slims down, and more of each payment starts going toward your principal balance. This process is known as amortization.

It means that lenders effectively earn higher interest in the early years of your loan. That, in turn, means that they want to perpetually keep you in those early years by refinancing you as soon as you have enough equity to do so.

In the worst cases, predatory lenders push older borrowers—particularly those with impaired memories or cognition—to refinance as often as every year.

How to Protect Yourself

Older borrowers should discuss major financial decisions with a trusted child, friend, or financial advisor. That includes refinancing their home or investment properties.

But all property owners should understand mortgage lenders’ incentives. Don’t just look at whether a lender can offer you a lower monthly payment or a juicy cash-out refi—calculate the remaining life-of-loan interest on your existing mortgage and compare it to the total cost (including fees and interest) of the proposed loan.

While your loan payoff date might seem infinitely far away and extending it with a refinance might feel like trading one far future data for another, that’s a cognitive illusion. Don’t put yourself into a cycle of endless debt.

9. Timeshares

My stepmother got sucked into a timeshare program from a major hotel chain. Now she and my father own not one but two timeshare packages.

That they almost never use.

If they do find a destination they want to go to, it usually qualifies as a “premium” hotel property and costs double or triple the points. If they want to bring their adult children, they need the upgraded apartment suite option—for triple or quadruple the points.

See where this is going?

I’ve attended a few timeshare presentations myself, and I can tell you firsthand that their salespeople are some of the most persuasive in the world. They have a sexy product and a streamlined, perfected sales pitch honed over many thousands of presentations.

How to Protect Yourself

Don’t attend timeshare presentations, even if they offer you a free vacation.

Hard stop.

10. Hidden Fees from Crowdfunding Platforms

I’ve invested in a lot of real estate crowdfunding platforms, and reviewed even more.

Some are transparent, with clear, simple fee structures. One of my favorites, Groundfloor, doesn’t charge investors any fees. They earn their revenue by charging fees to borrowers (check out our full Groundfloor review for more details).

Other crowdfunding platforms bury their fees in their SEC investment circulars. As a layperson, good luck finding them in these 100+ page legal documents.

One common way to hide fees is by billing expenses to a company that they own and operate. On the more benign side, they might manage the property in-house and charge property management fees, which is fine so long as they disclose that and the fees are in line with the market. But the waters get murkier when they handle all repairs and maintenance in-house, and bill these as expenses without you ever knowing how much they charged for any given repair or how involved the repair actually was. For example, a $900 wall repair could have been a simple patch.

How to Protect Yourself

First, read third-party reviews from expert investors who have actually invested their own money on a platform. For instance, Seth Williams invested money in Fundrise, left it there for five years, and then withdrew it. In his Fundrise review, he breaks down the returns he earned and the other pros and cons of his experience with Fundrise.

Do as much research as you can on each crowdfunding platform, and in particular, their fee structure.

11. High-Dollar Guru Coaching Programs

I’m loath to admit it, but I myself have taken real estate coaching programs for astronomical sums. They all too often disappoint.

In most cases, they start with something cheap, or even “free plus shipping” (which isn’t free, because shipping never costs as much as they charge). Then they take you up an escalation ladder with their $99 program, then their $999 program, then their $9,999 program, and so forth.

How to Protect Yourself

In my experience, paying four- or five figures for an education program is usually a raw deal. At that level, you should really work with a one-on-one or small group coach, where they hold your hand through several deals or otherwise guarantee a specific result.

They may not even charge a fee for this but rather take a percentage of the result they help you achieve. For example, they might partner with you on a real estate deal with 50/50 financial investment, but they get 70% of the profits in exchange for them holding your hand and helping you secure that first deal. There’s nothing wrong with that model—in fact, it ensures their interests align with yours.

12. Not-So-Turnkey Properties

As a real estate investor, you see turnkey properties available for sale all the time. And some of them truly are rent-ready, or have existing tenants paying rent each month.

But some unscrupulous sellers simply cover up the defects and hope that a dumb buyer comes along who fails to do a home inspection or whose home inspector misses lurking problems.

“Often, so-called ‘turnkey properties’ come with hidden defects,” explains Chris Lee, cofounder of Landlord Gurus. “I’ve especially seen problems related to water damage, such as roof or pipe leaks and mold.”

Hidden problems could also include structural defects behind the walls or flaws in the mechanical systems that you just can’t easily detect. In some cases, they could cost tens of thousands to fix.

How to Protect Yourself

“Always get an inspection done,” insists Lee. “Even in a seller’s market, invest the time and money to bring in an inspector, and an experienced and honest one at that.” Ask for a referral from your real estate agent if you don’t know one.

Ask them point-blank: Which structural components could you not see? Do you have any concerns whatsoever?

Trust your nose as well. Do you smell moisture? Mold?

Finally, take all the seller's information with a proverbial grain of salt. If you only have their word on something important—verify it.

Final Thoughts

If something ever looks or feels too good to be true, it probably is. Follow your gut when evaluating offers, listings, or other opportunities in real estate.

Most importantly, get an expert unbiased opinion when verifying something. When something feels even remotely suspicious, call in someone who knows more than you do to double-check it.

The post 12 Real Estate Scams You Should Never Invest In (According to Experts) appeared first on REtipster.

As a semi-nomadic expat, I certainly get that. Location is everything in real estate, and you need to invest strategically based on the best markets for investing—not wherever you happen to live at the moment.

Long-distance real estate investing can come with its own challenges, depending on how you invest. But in today’s world, you have more options than ever to invest hands-off.

Try these tactics to invest in real estate anywhere in the world, ranked in order of ease.

1. Public REITs

For all my reservations about REITs (more on those momentarily), there’s no easier way to invest in real estate.

With the click of a button, you can buy shares in any real estate investment trust in the world. You don’t even need to open a new account; you can invest with your existing brokerage account.

You also don’t need much money to invest in REITs. The minimum investment is simply the cost of a single share, which could be as little as $10. Plus, you’ll be hard-pressed to find any real estate investment with more liquidity than REITs. You can sell shares instantly and anytime, without penalty or cost.

For all those upsides of REITs, I still don’t normally invest in them. The downside of all that liquidity is volatility since investors can buy and sell shares for free at a moment’s notice.

And because REITs trade on public stock exchanges, that volatility shares an uncomfortable correlation with stock markets. A MorningStar study over several decades found a correlation of 0.59 between REITs and the U.S. stock market. That means they share a similar correlation to the broader stock market as telecommunications stocks, energy stocks, and consumer staples.

In turn, that means you get very little diversification benefit by investing in U.S. REITs. But they still offer a convenient way to invest in international real estate and specific real estate types, such as self-storage facilities.

RELATED: Are Self-Storage Units a Good Investment? Pros and Cons of Owning Storage Units

2. Private REITs and Funds

What if you could invest in similarly structured funds, owning many properties, completely passively, but without that correlation to stock markets?

You can do this via private REITs and non-REIT funds. Instead of buying and selling shares through your brokerage account, you buy and redeem them directly with the company that owns the properties or property-secured loans.

You probably know this model better as real estate crowdfunding.

Over the last decade, dozens of real estate crowdfunding companies have entered the space. For example, you’ve probably heard of Fundrise and even read about Seth’s experiences investing with them for over six years.

Other crowdfunding platforms with REITs and funds include Streitwise (full review here), RealtyMogul (full review here), Diversyfund (full review here), and HappyNest (full review here).

Most pay strong dividend yields, and share little correlation with stock markets. That gives them true diversification value as you build a broad investment portfolio.

On the downside, most are not very liquid and charge a penalty for early withdrawal. That locks up your money for several years. Consider private REITs a long-term investment, best left alone to pay dividends and compound.

3. Property-Secured Loans

You probably know mortgage REITs: funds that own loans secured by real estate. But there are several other ways to invest in property-secured loans.

Some crowdfunding platforms let you invest in either individual loans or pooled funds that own many loans. My favorite of these is Groundfloor, which offers both models. You can pick and choose individual loans, investing as little as $10 in each, and typically earning between 7% to 15% interest on them. While these investments aren’t liquid, they are short-term, with loan terms ranging between three to 12 months on average. That’s a rarity in real estate investing.

Even more rare is the liquidity offered by their pooled loan fund. Groundfloor’s “Stairs” fund lets you pull out your money anytime, penalty-free. The downside of that liquidity is that the fund pays 4% to 6% interest rather than the roughly 10% average earned on individual loans.

Read our full Groundfloor review for more information about both investment types.

Alternatively, you can lend other real estate investors money directly in the form of a private note. Just make sure you know and trust the investor with your money and that they have a long, verified track record of success in real estate investing.

4. Fractional Ownership in Rentals

If you like the idea of owning rental properties, but don’t want to hassle with renovations, renters, or ongoing repairs, consider buying a fractional share in a rental property.

You become a partial owner, entitled to your share of the rental income and property appreciation. But you invest completely passively, letting someone else find the deal and manage the property.

Several fractional property investing platforms have come on the market in recent years. I’ve invested in properties through Arrived and Ark7. Both let you buy shares in rental properties for $100 or less, and Arrived offers short-term vacation rentals in addition to traditional long-term rentals.

In fact, you can even buy shares in overseas rental properties this way. I recently spoke with the founder of Foothold, which is in the process of buying ten units in the trendy Palermo district in Buenos Aires. These will be rented as vacation properties on Airbnb, and as someone who has stayed in Palermo several times, I can tell you firsthand how lively it is.

This model lets you take advantage of financial troubles elsewhere in the world to buy properties at a discount. Foothold chose Buenos Aires, for example, because Argentina has suffered a currency crisis over the last two years and saw triple-digit inflation in 2022. Banks don’t lend mortgages in that environment, which means cash investors can score deep bargains.

5. Real Estate Syndications

You can also buy fractional shares in commercial properties like apartment complexes. It’s just as passive, and the returns are often significantly higher. I’ve seen deals that paid over 100% annualized returns.

These types of passive commercial real estate investments are known as syndications. You invest as a limited partner in the project, with rights to a share of the property’s rental income and appreciation. When the property sells, you get paid out proportionately.

You also get nearly all the same tax advantages as buying properties directly. In fact, you often get accelerated depreciation on these investments.

So why isn’t everyone investing in them?

First, some syndications only allow accredited investors to participate due to SEC regulations. But even those that allow non-accredited investors still require high minimum investments, typically $25,000 to $100,000. The only way to get around that high minimum is by investing as part of a real estate investment club and pooling your money to reach the minimum.

Finally, these investments are not liquid. Once you invest, you lock your money up until the property either refinances or sells. But that raises one last reason to invest: some syndicators refinance and return your initial investment to you, but you still keep your ownership interest in the property. You keep earning distributions, and the property keeps appreciating, but you’ve already gotten your money back. When you no longer have any money invested in a property but keep earning returns on it, you earn infinite returns as a percentage of your $0 investment.

6. Raw Land

Some land investors become millionaires without ever hassling with a single tenant or repair. Or, for that matter, ever stepping foot onto a property they own.

The business model is as simple as it gets: buy land at a discount and sell it for its full market value. When you sell, you can either sell outright or offer a land contract, letting the buyer pay in installments. If they default on installment payments, you don’t have to go through the expensive foreclosure process (nor eviction), since no one lives there. You just reclaim possession and list the property for sale to someone else.

Still, it takes work to choose a market for investing and set up a system for finding deals on discounted land. For example, some investors contact land owners who have defaulted on their property taxes. There are as many ways to score good deals on land as other types of real estate, but far less regulation.

If you want to learn how to invest in land, check out our Land Investing Masterclass.

7. Partner with a Local Investor

Rather than investing in long-distance real estate alone, you can always partner with an experienced local investor.

They do the heavy lifting of finding deals, coordinating with contractors, overseeing repairs, and managing tenants (or hiring a property manager). You write a check and potentially help arrange financing.

You may have to give up a percentage of the profits to compensate your partner for their labor. But that could well be worth leaving those headaches to someone else.

8. Turnkey Rental Properties

As a recovering landlord, I can tell you firsthand that rental properties are not as passive as many pundits make them out to be.

That said, it’s theoretically possible to buy turnkey properties in another city or state and hire a property manager to handle all day-to-day operations. I say “theoretically” because even turnkey properties often need a few finishing touches, and only the best property managers are 100% reliable with no oversight. In my experience, you often have to manage the manager.

If you go this route, expect to put in plenty of work upfront in choosing the right market for investing and the right boots-on-the-ground partners. The latter should include a property manager, real estate agent, and contractors at a minimum. Once you have a strong local team in place, you can invest with less labor.

Check out Roofstock, a marketplace for turnkey rental properties across the country. You can read our full Roofstock review here to learn how they work.

9. Turnkey Vacation Rentals

On the one hand, vacation rentals certainly take more work to manage than long-term rentals. But I’ve actually found that vacation rental managers appreciate the work required more than long-term rental managers, and don’t shy away from the labor.

Vacation property managers are constantly in and out of your property, checking on it, watching for repairs. They constantly have a finger on the property’s pulse. In my experience, long-term rental managers rarely inspect the properties under their charge, even when they’re supposed to do it once or twice a year.

Even so, vacation rentals take plenty of work. Beyond finding the right property in the right market, you have to furnish and decorate it (tastefully), set up and pay utilities, and (of course) put the right local manager in place.

On the plus side, maybe you can stay there as a tax-free working vacation while furnishing and decorating it. Just a thought.

Final Thoughts

You can invest in real estate anywhere in the world, but that doesn’t mean you want to become a landlord of a Cambodian rental property. The more passive the investment, the better, as you get further afield.

Start simple with the first five options on the list above if you’re new to long-distance real estate investing. If you’re committed to direct property investing, you can venture into the latter three options, but beware that they’ll take far more of your time and labor.

The post What’s the Easiest Way to Invest in Real Estate Long-Distance? 9 Options Ranked by Difficulty appeared first on REtipster.

But even though most people get the gist of how the business model works, they don’t grasp all the pros and cons of owning storage units.

Strap in for a lightning overview of self-storage and what you need to know before jumping in.

How Does Self-Storage Investing Work?

You can invest in self-storage facilities in many ways. The easiest of those is to buy shares in a publicly-traded REIT that owns and operates storage facilities.

While less liquid, you can also access self-storage investments through real estate crowdfunding websites. For example, EquityMultiple, RealtyMogul, and CrowdStreet sometimes feature these investments. But only accredited investors can participate in these private equity investments.

Non-accredited investors may be able to find real estate syndications that allow them to participate. While I’ve never invested with him and am not endorsing him in any way (CYA, as they say), Tom Dunkel of Belrose Storage Group sometimes allows non-accredited investors.

Or, at the furthest end of the simplicity spectrum, you can build or buy a storage facility yourself. It may not be easy per se, but it can be profitable, which offers the perfect segue into the pros and cons of owning storage units.

RELATED: Concreit Review: Most Flexible Real Estate Crowdfunding Investment?

Pros and Cons of Owning Storage Units

Like the idea of self-storage investing but don’t fully understand the industry?

Glad you’re taking the time to ask questions and do your due diligence!

Pros of Self-Storage Investing

Investors park money in self-storage facilities for the following reasons.

Recession Resistance

When the economy contracts, many people downsize. Others move in with friends or family, which is a phenomenon known as “household bundling.”

Either way, they end up with less space for all their stuff. Some may sell, but others don’t mind paying a small monthly fee to store their precious trinkets and knick-knacks.

That’s precisely why the only REIT sector that delivered a positive return during the Great Recession was, you guessed it, self-storage.

Low Maintenance Properties

Storage facilities don’t need many of the mechanical systems or structural complexity that houses or commercial buildings do.

They don’t need plumbing, basements, or multiple stories. In many markets, they don’t need HVAC. And while they do need electricity in some cases, they only need the simplest wiring to ensure each unit is well-lit. That makes for easy (and cheap!) buildings to maintain.

Low Maintenance Renters

Storage renters don’t call you about plugged toilets or leaky faucets. They pay their rent each month, and they don’t, and you eject them.

Easy Evictions

Every state and many major cities impose eviction laws as part of their landlord-tenant code. Some are more landlord- or tenant-friendly than others, but they all require a series of legal notices, a court hearing, and a scheduled put-out date. In some cases, this takes many months—I’ve had evictions take 11 months before.

None of that happens with storage units. If the renter stops paying, you can auction off the contents of their unit after a brief grace period and a notification attempt or two.

Minimal Regulation

This raises a broader point: self-storage facilities don’t have nearly the same regulatory headaches as residential real estate. You don’t have to worry about complex landlord-tenant laws, rent control, rent stabilization, or 30-page leases. It’s a simple contract: you pay me, I hold your stuff, the end.

Automation and Minimal Labor Costs

Unlike multifamily properties with 100+ units, storage facilities often don’t need an on-site manager. You can automate entry and exit from the facility and renters’ access to their units.

Sure, a manager should check on the buildings for maintenance periodically, and you may need some security depending on the area. But the simpler buildings and business model mean less labor all around.

Cheap Land

You don’t need to buy space in the middle of the downtown business district to attract tenants for self-storage. Quite the opposite—you only need land that doesn’t sit too far from residential areas. That means you can buy cheap land far from any foot traffic.

High Profit Margins

Self-storage facilities can pay high profit margins. According to Investment Real Estate LLC, the average profit margin for storage facilities is 41%. You can see how AJ Osborne went from comatose to a multi-millionaire with self-storage!

Downsides to Storage Investing

Before pulling the proverbial trigger on a self-storage investment, consider the cons as well.

Cost to Acquire

If you plan on directly buying or building a storage facility, plan on paying a pretty penny. Cheap land aside, you’ll still shell out hundreds of thousands of dollars at a minimum and possibly seven figures.

Variable Operating Costs by Market

Sure, self-storage costs less to operate than residential properties. But operating costs do vary by the market where you set up shop.

You might need air conditioning if you're operating a climate-controlled facility in a hotter climate. In colder climates, you might need heat. And in high-crime areas, you probably need more advanced security.

Marketing Costs

Self-storage operators often need complex and costly marketing campaigns to reach and maintain high occupancy. That could include pay-per-click advertising, billboards, and even radio or TV ads. And because you’ll have constant turnovers, some of these marketing costs must continue indefinitely.

Risk of Oversupply and Hyperlocal Market Shifts

The barriers to entry for self-storage facilities just aren’t very high. Read: competitors can enter the market at any time.

That says nothing of how shifts in your micro market can change demand. That expected military base or new employer opening a headquarters could fail to materialize. The developer planning on building a thousand new homes could pull the plug. If you were counting on future demand growth, that could leave you in serious trouble.

Are Storage Units a Good Investment?

Yes—with caveats.

All investments, real estate and otherwise, come with risk. Ignore those risks at your peril.

That said, self-storage facilities offer operational simplicity in a recession-resistant asset class. It’s a counter-cyclical niche that does well even when the rest of the economy stumbles. Consider starting small with REITs, real estate crowdfunding, or syndications, and as you learn more about the industry, you can explore buying or building your self-storage property.

The post Are Self-Storage Units a Good Investment? Pros and Cons of Owning Storage Units appeared first on REtipster.

It's always great to hear from people who think I'm qualified to help them, but I learned years ago that, for several reasons, coaching isn't the best use of my time.

It's why I created REtipster.com, which gave me a way to help many more people in a much more scalable way.

I'm just one guy, after all, and my time is limited. I could either spend a few hours helping one person solve most of their problems or a few hours helping hundreds of people solve one problem at a time. I chose the latter.

Even though I chose not to spend my time coaching people one-on-one, I have to admit coaching certainly has its place. There's no substitute for getting one-on-one help from a qualified individual who can address your specific deal or situation.

But how do you know when someone is “qualified” in the first place? After all, most coaches and consultants will position themselves to look as good as possible because they want your business. So how can you know when you've got the real deal?

Here are some questions that can help inform you about who you're working with.

Background Questions

What is your background as a real estate investor? How long have you been a real estate investor, and how long have you been a coach?

If you're looking seriously at a coach, you probably already have a decent idea of why they're qualified to help you. Even so, you may learn something new by asking this question that either confirms or denies their viability as a coach.

Why did you decide to get into coaching?

There are many possible answers to this question, and none are good or bad, right or wrong. This question will add color to your understanding of who a coach is and why they do what they do.

Are you still actively doing what you're teaching or teaching something you used to do?

The average person may not realize this, but “coaching” is an entirely different business than real estate investing. There may be some overlap, but most of time spent coaching is time they don't spend doing deals of their own.

This isn't a disqualifier, but it's still a good question to make sure you understand how actively involved they are in what they're teaching.

Expertise Questions

Can you provide any references or testimonials from your past clients?

Find out what results this coach's past clients have achieved.

Also, remember that most successful real estate coaches are masters at self-promotion. If they don't know how to sell their services and make themselves sound good, they won't make it very far as a coach. Every professional educator I know (even the bad ones) can come up with testimonials and positive reviews… do be careful not to be sold on this single question.

It's always worth asking for these, but also realize this is one of many different things you'll want to consider when hiring a coach.

Do you have any specific areas of focus, expertise, or sub-niches you teach about?

Some coaches focus on one particular thing (deeper than wide), while others have a broad list of things they can help you with (wider than deep). Sometimes, a coach may have specific areas of expertise you aren't even aware of yet!

This question will help you understand who you're dealing with and what they can do for you.

In your opinion, what are you NOT qualified to help me with?

This is an essential question because any honest person should be able to tell you at least a handful of things they are NOT an expert in. You're looking for an honest assessment of where they fit into your plans and goals (if they fit at all). A good, successful coach shouldn't need your business to survive another day; they should have plenty of clients lining up to work with them.

So if you find them saying “Yes! Yes! Yes” to everything without any admission of where they aren't the best, it's time to pause and reflect.

Setting Expectations

What is your coaching style?

Working with someone whose coaching style aligns with your learning style and goals is important. Even if a coach comes highly recommended by someone you trust, make sure that coach fits your style too, not just the person who recommended them.

What is the scope of your coaching services?

Even the best coaches aren't experts at everything. And there are limits to how much help they're willing and able to provide.

Before you get into a coaching relationship, make sure you understand their areas of expertise and how far they can carry you before you need to hit the ground running.

Can you provide a clear plan or outline of what our work together would look like?

Every coach has a different style in how they teach. Some will take you through a structured curriculum, and some will have ongoing, free-flowing conversations with their clients with little structure. Whatever the case, you'll want to understand what you'll get after you start working with them.

How much access will I have to you? How often will I have it? How quickly should I expect responses from you?

Some coaches communicate with a single medium like email. Other coaches will communicate via phone, Zoom, Slack, email, and Facebook Messenger. Some coaches will give you unlimited access to them. Others will provide you with one hour every two weeks, and that's it.

Whatever the case, get clear about how much access you'll have to your coach or their team.

Who will I be working with as my coach?

It's essential to understand who your actual coach will be. Will you be working with the face of the organization or one of their hired coaches (usually, a former student whom they pay a small portion of your coaching fee while they pocket the rest of the cash)?

What will I be responsible for in achieving my goals?

In the end, you are responsible for your own success. But even so, if you're paying a coach, they should also play an essential role in that journey. The key is to understand where their work stops, where your work starts, and how much your responsibilities overlap. Understanding this upfront will help avoid frustration if the coach doesn't do what you expected.

What will you be responsible for in achieving my goals?

Some coaches use the “Socratic” teaching method by asking well-pointed questions and engaging in dialogue rather than simply giving you a lecture. Other coaches will spell everything out for you, tell you precisely what to do, and then you have to do it. Other coaches will literally do some of the work for you!

However a prospective coach works, this is your chance to understand what role they might play in the business relationship.

What other costs will I need to pay outside of your coaching fee?

Make no mistake—the cost of a coach is only the beginning. Ensure you understand ALL the costs you'll have to cover to reach your goals and objectives. That includes software, services, other educational materials, and anything else it will take to cross the finish line. You don't want to start something if you don't have the resources to finish it!

How much of my time will be required to reach my goals?

Similar to the money issue, any realistic success plan will probably require a sizeable amount of your time. This is an excellent opportunity to get their best estimate for how much time you should plan to dedicate to reaching your goals.

How will we set goals and track my progress?

There isn't much of a point in having goals if you don't know when you've achieved them. Having a clear plan for how you will work towards your goals and measure progress is essential.

Can you provide any ongoing support or resources after completing our work?

What does the long-term relationship look like? Will there be a long-term relationship at all? Whatever the case, this is the time to understand when and how the relationship ends.

What is your cancellation and refund policy?

I don't know many coaches who offer refunds on their services because coaching is a time-intensive task, and a good coach's input is precious. Even so, if you get cold feet or aren't happy with what you get, you'll want to know your options if you decide the coaching relationship isn't a good fit.

Keep in mind it's not fair to expect perfect answers to all of these questions.

Every coach has limits, whether it's their time, knowledge, or availability.

These questions aim to inform you and set your expectations about what a coach can offer. If you don't like what you hear on these questions, then they probably aren't the right coach for you.

Vetting a coach is part of why we came up with REtipster Certified Coaches, so I could send people like this to other qualified experts in the business of providing this kind of help.

REtipster Certified Coaches

Are you looking for a coach to help in your land investing business? A decent coach can be hard to find. That’s why we’ve compiled a list of some experienced, trustworthy, reliable coaches that we trust.

REtipster Certified Coaches are dues-paying members who have been vetted and have agreed to abide by the highest ethical standards and code of conduct.

These coaches are independent contractors. REtipster does not employ them, and we do not dictate their pricing or the specifics of what they teach. We encourage you to evaluate them and make your determination about their suitability for your needs. Ask them some of the questions above and see if they're the right fit for you!

The post Don’t Get Burned! 20 Questions to Ask BEFORE Hiring a Real Estate Coach appeared first on REtipster.

Whenever I tell people I specialize in buying and selling LAND, I get a lot of blank stares. There seems to be a widespread (and erroneous) assumption that vacant land is a “weak” or even pointless investment because:

• It doesn't produce income.
• It just sits there, and nothing happens.
• It's flat-out boring.

It's an unfortunate misconception because the truth is, vacant land is capable of producing some serious cash flow. It's one of the best investments on earth because of its hands-off nature and versatility.

10 Reasons to Invest In Land

I LOVE the fact that land just sits there, and nothing happens.

The simplicity and stability of owning the right piece of land, purchased at the right price, far outweigh the problems with every other type of real estate. If you've overlooked raw land as a viable investment opportunity in the past, you need to take a few minutes and get educated about 10 rock-solid reasons you should invest in land!

1. With Vacant Land, You Don’t Need to Do Anything to the Property.

Forget construction! Forget renovations! You don't need to be an expert or know anything about how to rehab a property yourself. In most cases, you only need to know one thing: “Is the property suitable for what I want to use it for?”

As long as someone else can use the land for its highest and best use, a huge part of the battle is already won.

2. Raw Land Is a “Hands-Off” Investment.

Have you had enough of dealing with problem tenants? How about toilets, bugs, mold, lawn care, leaking roofs, burst pipes, broken furnaces, and the hundreds of other issues with owning buildings?

Vacant land doesn't involve any of those things. Once you buy it… it sits there, it behaves itself, and nothing happens.

3. Statistically, Vacant Land Owners Are Highly Motivated to Sell.

Why? Because vacant landowners (by default) are always absentee owners. When a person doesn't live inside (or even near) the property they're trying to sell; there's less of an “emotional connection” because it isn't their primary residence. In many cases, you'll find that these sellers are willing to sell their land for pennies on the dollar—simply because they don't live near it or it's not producing any income for them (because they don't know how to optimize their land correctly). As a result, they are much more apathetic about it.

Find these people, and you will find some incredible deals.

4. Land Investors Have Far Less Competition to Deal With.

Are you tired of dealing with such stiff competition on every property you try to buy? Are you sick of getting outbid on every good deal you're lucky enough to find?

Well, guess what… there is very little competition in the world of raw land investing. Most real estate investors have their minds set on things like houses, apartments, and commercial property because that's what everyone else does. They don't understand the superior benefits that come with land, and this can play to your advantage!

5. Land Investors Call Their Shots.

When you buy vacant land the right way, it's easy to buy each property with your own cash and avoid dealing with banks and mortgage companies altogether. When I started as a land investor, I had $3,000 to my name.

And to this day, I have never had to borrow money from a bank. Ever.

When you know where to look for great deals on land, it requires minimal start-up capital to get your business up and running.

6. When You Learn How to Research Properties Effectively, You Can Buy and Sell Vacant Land Properties Without Ever Seeing Them in Person.

A few years ago, I bought and sold a parcel of land that grossed over $44,000. The entire process took me five months from start to finish. To this day, I've never seen this property with my own eyes. Everything was done virtually, using the tools you and I have available for FREE online.

Remember, the beauty of vacant land is that it has no structures. This means the inspection process is straightforward—and if you're doing the right research, you can easily buy your properties without visiting them in person.

7. Add Seller Financing to the Mix and EXPLODE Your Income Potential.

When you combine vacant land with the power of seller financing, it's a match made in heaven. It can open the doors to finding MANY more buyers because most banks are hesitant to lend money on vacant land. Due to the scarcity of “easy money” financing for vacant land properties, land investors can use this to their advantage by charging a higher-than-market interest rate, and many people will gladly pay it.

Seller financing is also a great way to create multiple streams of passive income. Properties sold this way can act like rental properties but come with virtually none of the typical headaches for which the latter are known.

8. Land Is Very Inexpensive to Own as a Long-Term Investment.

When you buy a piece of land for the right price, there are no mortgage payments, no utility bills to pay, the cost of property insurance is nominal (if you have it at all), and property taxes are incredibly cheap. If you want to park your cash somewhere and forget about it, vacant land could be the investment vehicle you're looking for.

9. Land Gives Its Owner Peace of Mind.

Think about it: land is a long-term, tangible asset that doesn't wear out and doesn't depreciate. Nothing can get broken, stolen, or destroyed.

Put all of these benefits together with your ability to buy it for next-to-nothing price… and can you think of a better combination?

10. They Aren't Making Any More of It.

Most people don't think of vacant land this way, but the reality is that land is a precious resource with limited quantities. Especially when you purchase land in the path of growth, you will find yourself with a finite asset that many other people want to get their hands on. Stocks, bonds, mutual funds, and 401Ks all make sense in certain scenarios… and so does land.

If you go into this with the intent of holding the right property long-term, it can make much more sense (and be a lot more profitable) than any other retirement vehicle out there.

Land Investing Is a Huge Opportunity

I'll be completely honest with you. Land investing is—without question—the most powerful strategy I've used to build my real estate investing career. I've bought and sold hundreds of vacant land properties and generated a lot of passive income by selling them with seller financing.

After running the REtipster Blog for a few years, many readers had asked me to put together a comprehensive land investing course, so they could learn all the basics of how my business works from start to finish, so I finally did.

The Land Investing Masterclass is a paid membership website that offers access to a 12-module, 80+ lesson course on how my land investing business works (with all-inclusive access to my tools, videos, calculators, and more). If you're looking for an in-depth, step-by-step guide on how I managed to skyrocket my income on a part-time basis and quit my job through the power of land investing, this will show you how it's done.

If you'd rather dip your toe in the water and get educated on the most basic concepts and opportunities available in the land investing space, you might also consider the Land Investing Foundations course, which explains how to speak the language of a land investor, pursue the right strategy that compliments your strengths, and identify good markets, good properties, and good opportunities.

Obviously, I wouldn't recommend pulling the trigger on anything like this unless you're ready to take it seriously and treat it like a business. If you think you've got what it takes and you're ready to dive in, I can tell you—from personal experience—that this is an investing strategy that works (trust me, I've got a lot of big checks to show for it).

Come check it out; I think you'll like it!

The post 10 Rock-Solid Reasons Why You Should Be Investing In Land appeared first on REtipster.