How to Score Great Deal When It’s a Seller’s Market

The market is insane right now in so many areas. Kansas City, Phoenix, Los Angeles - these are just a few of the places where properties are flying off the market at astounding rates. With such a tight inventory and very little time to make a decision and act, investors have to be extra motivated when looking to add to their portfolio. They’re also having to get more creative in how they’re finding properties, thanks to the fierce competition they’re facing.

This isn’t to say that there aren’t still amazing deals out there, though. There are. You might just have to go about finding them a little differently than you did, say, 5 or 7 years ago. Here are some of the strategies investors are using to find properties in the seller’s markets we’re seeing right now.

Make the first move

One strategy that’s proven effective is for investors to take matters into their own hands. Rather than wait for a property to be listed, they’re contacting owners themselves to gauge their interest in selling. This works especially well for properties that are in not-so-great condition because, often, the owner is unable or unwilling to pay for repairs, making them more likely to consider selling. If you are see a particular property or are targeting a certain area, take an afternoon to drive around and collect some intel. Talk to people, find out who the owners are, and reach out to them. What you find may surprise you.

Check expired listings

Expired or withdrawn listings - those that were on the market but didn’t sell and were subsequently removed - can also generate leads. These people were obviously interested in selling at one time, so maybe they still are. Perhaps they couldn’t get the price they wanted, or personal matters forced them to postpone selling. Whatever the case, it doesn’t hurt to contact these folks and see if they might consider selling again.

Make an offer they can’t refuse

Money talks, especially in a seller’s market. When there are several offers on the table (and there usually are in this type of climate), you’ve got to make sure yours is best. Of course, there’s a fine line between making an offer they’ll want to accept and shooting yourself in the foot because your big offer cuts into your profit potential. You have to make sure that the math works and the investment will be profitable. Your offer doesn’t have to be sky-high to be accepted, though. You can also entice sellers by offering all-cash, a quick closing, or no warranty, just to name a few ideas.

Turn to turnkey

With an inventory of move-in ready properties, turnkey companies offer another alternative for investing in a hot market. These properties are not on the MLS, so your only competition is from other investors like yourself. This means you have more time to investigate a potential investment, and less pressure to act without proper due diligence. The many benefits of turnkey properties (no repairs to be made, many already tenanted, immediate cashflow opportunities) also make them a smart choice and a favorite of investors.

Finding new investment properties when inventory is low can be a challenge, but it’s not impossible. With some out-of-the-box thinking and extra motivation, it can be done. The strategies above can help, but don’t jump on a property simply because you’re worried about someone else snagging it before you’ve decided. Doing your due diligence is still important and can save you from making a big mistake. Be proactive, do your homework, and act fast once you’re sure. That’s how you add to your investment portfolio in the midst of a seller’s market.