Finding a home to live in is certainly more challenging than buying a home for investment.
People buy homes for many different reasons. When buying a home to live in, one may be concerned with the location, the size, the number of bedroom and bathrooms, the floor plan, if it has a pool and so on. I am sure you are getting the idea. On the other hand, when buying as an investor although these characteristics are a consideration, they are not the reason for deciding whether or not to buy the property. The deciding factor is, can I make money buying this property.
When looking for a home to live in we start our search by looking for a home that is the neigborhood in which we want to live and has the characteristics and features that we are looking for in a home. When buying a house for investment purposes, the investor’s thought process is different. Therefore the search is different. The information gathered is; where is the property located? What is it currently worth? How much work does it need? How much can I pay for it and make money based on whether I want to hold it or resell it quickly.
When looking for a home to live in, since we have a pretty good idea of what amenities we want in the home, we may begin our search by driving through neighbors in which we might want to live. We may contact a realtor. We may look at the classifieds in the newspaper or we might do what has become most popular, look at the homes listed for sale on the internet. We do these because we can quickly find out if the homes have at least the basic amenities that we desire in our home.
On the other hand, an investor is looking for properties that meet the basic criteria of being priced right. The price or terms under which an investor can buy a property is the single most important factor. Since the investor is looking for the “best” buys, he or she will tend to look in the places in which discount properties can be found. These can be found in many of the same places that a retail buyer would look. However, the investor is targeting motivated sellers.
Motivated sellers can be found everywhere. They are people that have financial issues, divorces, job loss, job transfer, foreclosures and many other reasons. Although not thought of in quite the same way, banks and other mortgage lenders are also motivated sellers. They very often sell their properties in large packages. A foreclousures list coming from a lender provides an opportunity for an investor to pick up a large number of properties at bargain prices.
Although a person looking for a home to live in will not be interested in buying a foreclosure home list, they very well could benefit by purchasing a home on that list from an investor that purchased the bank foreclosure list. If the home meets the home buyer’s needs and desires for the place in which they want to live, this can certainly be a win/win for everyone.
