The first and most important thing to remember about finding profitable properties is this: you make your profit when you buy not when you sell. Therefore if the seller is not motivated to sell, you will not be able to negotiate a good deal. This is so important that it merits repeating: you make your profit when you buy not when you sell. So where can we find motivated sellers and therefore potentially profitable properties? In this article we have brainstormed the most common methods, situations or types of property that can prove profitable. However, you may be able to think of still more.

Estate Agents.

Estate Agents are still the number one resource for finding profitable properties. Although over the years we have moved more towards direct to vendor – particularly for land (see later), the vast majority of our property portfolio has been sourced through Estate Agents. They have a unique insight into the market and obviously have a direct line into the seller. Be careful with your questioning and don’t resort to the lazy ‘got any deals?’ approach. Establish rapport and look for indications of seller motivation. ‘Why is the owner selling?’ is simple and effective. We also typically ask who has set the price for the property as this gives us a good insight into the seller and opens up the discussion. We have found that it is easier to work well with a smaller number of Estate Agents than try to build relationships with everyone. Some agents will be more supportive and interested in what you are doing and you will find that you naturally gravitate towards these people at the expense of others.

Auctions

Auctions are a long standing and popular way of finding profitable properties but buyer beware! You must remember that just because the property is being sold at auction doesn’t mean it is a ‘deal’. Remember you still have to do your due diligence and stick to your price. Please do not bid blind on a property. You may also be interested in our recent article on this subject.

Solicitors

Solicitors can be a valuable source of motivated sellers, quite often because of access to probate properties. These properties are sold after being inherited  or as part of the subdivision of an estate. Often the new owners or beneficiaries of the estate have no emotional attachment to the property and want to realise their inheritance cash quickly.

Repossessions

It is possible to get lists of repossessed properties in your area. Naturally these are being sold to clear debt against them. Be aware however that they can be popular and thus this initial ‘deal’ can quickly get bid up to a point where they are not profitable. You need a similar mindset here to finding profitable properties at auction.

Direct to Vendor

Sometimes the simplest method is the most effective. This is actually our main area of focus at present both for land, distressed properties and brownfield sites, which might consist of a property and a potential development plot. Consider approaching property owners directly using a leafleting campaign in your target area. You will need to research and adjust your leafleting campaign to see what works in your area. You could also identify your target property type by a ‘walk by’ or using a land research tool such as Land Insight or Nimbus Maps. You can then identify the owner and write a letter. Another way to find property owners is by using advertising boards, adverts in local shops, sign written cars and other sorts of bandit advertising. Get creative.

Letting Agents

Letting agents can be a good source of leads as they will have access to properties from retiring landlords. Often this can be a good way in to ‘block or portfolio deals’, the idea being that the necessary discount can be negotiated due to the bulk purchase. We actually own a lettings agency so this also helps!

Deal Sourcers

Packaged deal sourcers find a sell on leads and deals to investors. There is a fee to pay which is dependent on the negotiated equity or other value in the deal.

Conclusion

These are just a few of the large number of ways of finding profitable properties. Good luck!