How To Look For BMV Properties
Investors in general want to buy low and sell high. What better way to buy low than to purchase properties that are below market value? Unfortunately, not all BMV properties are created equal. Some have the potential to make profit, others have the potential to cause headaches.
The key to success is to know which BMV property is a good buy. Here are factors you need to consider:
Make sure the area has potential for cash flow
Not every BMV property on the market is a good investment. For instance, it is extremely common to get a low price for top-notch properties in provincial towns in the far areas of the UK. They could have the most captivating nature or seaside views and most awesome architectures, yet the probability of you finding buyers or tenants is close to impossible.
Always place yourself in the point of view of a tenant. Most people want to have easy access to groceries, shops, restaurants, schools, (if you’re pertaining to a family with children) etc. Unless basic needs can be met, income potential will be low. So location still matters a lot when scouting for BMV properties.
Assess the sellers in the area
Assuming you’ve found a location with income potential, the next step is to find sellers of BMV properties. Now, finding people is usually hard work. So the best strategy is to make the sellers find you. Thanks to social media ads, it’s easy to run a campaign with tag lines like “Looking To Buy Property, Willing To Pay In Cash” or anything similar.
These ads can be sent out only to people within the area you are looking to buy. Hence, any leads that come to you will only be the sellers with properties in your desired location.
Once you have your leads, you can now assess which sellers are willing to sell below market value. Usually, those who need to move out quickly (e.g. new job in another town or country) will be willing to take a dive for a quick sale. Another reason is that they’ve had a property on the market for so long, and so are more amenable to selling at a lower price.
Don’t be afraid to haggle
Sometimes, the best way to get a property cheap is to actually to haggle the price. It is a known fact that almost all those who price their properties very low are expecting them to sell at a very low price. Use this to your advantage. They might just agree to whatever price you ask them, just to get rid of the property. But if they don’t sell it any lower, in this case you probably will still be able to acquire the property and gain some profit in it.
Of course, there is a caveat in all of this. If a property is completely rundown and will take you an arm and a leg to pretty it up to flip it or to lease it, then it might not be worth buying it, even at a below market value price. If you can bring with you a trusted contact (preferably a builder) when you inspect the property, you may be able to get a realistic estimate on how much it will cost you to refurbish, and what to refurbish to improve the value of the property when you sell it. In that way, you won’t be buying blind and leaving everything else up to chance.