Here’s 4 Tips To Help You Find Below Market Value Property
Below-market-value property, also referred to as BMV property, is not just a buzzword that circulates the property industry. It’s a tangible investment that can reap you great rewards. But how do seasoned investors find these unicorn deals, and how can a beginner investor locate the same deals for maximum returns?
First things first, property investing is no spur-of-the-moment decision. Buying property for investment purposes needs to be strategic, carefully planned and most importantly, financed with sufficient funds that do not put the investor’s likelihood at risk.
For example, if you are hoping t get into BMV property investing, and then implement the BRRR method (buy, refurbish, refinance, rent), you need to have a pool of money to not only put down a deposit, but also a significant amount of funds to rejuvenate the property to increase the property value and pull all of your money out of the deal. Sounds easy? You’ll be sorely mistaken. But with the right guidance, professional support and patience, you can find a BMV property that fits your budget, and also gains you short and or long-term returns.
Why seek below-market-value property?
Those who seek BMV properties want them for one obvious reason. To pay a lower fee for a profitable investment. Property has always been an extremely lucrative and safer investment strategy when compared to the likes of stocks and shares investments (all investments come with risks, however). BMV properties ensures that the investor is getting the best deal on a house that should otherwise be at market value, but do to environmental circumstances, falls below this average threshold. Don’t be fooled, as BMV properties don’t always make the deal more profitable than their more expensive counterparts, but it does, however, lower the entry barrier for investing in the property market, whilst also leveraging a smaller pool of money from the get-go.
Read: How Long Does It Take to Build a House?
How to find the market value property
Ready to get started? Here are 4 of the most utilised ways in which investors find BMV properties, and how you can begin your search too:
Network, network, network!
Before you even open up Zoopla and or Rightmove, you need to speak to the experts in the field. Networking is one of the most important ways to meet people in the industry who are doing what you hope to achieve. Property networking events take place across the country most months. Investors, estate agents, and even commercial building tycoons all gather to share key insights and information. You may even meet individuals with large property portfolios looking to offload some of their stock to regain some financial leverage, in which case, they may be more motivated to sell at a lower price. Open yourself up to meeting new people at these events. After all, they have the experience and knowledge to find what you are looking for.
Seek motivated sellers
Speaking of motivated sellers, you’ll be surprised how easy it is to find people looking to get rid of their properties pronto. From probates to messy divorces, there are households across the country that need to sell fast, and many wish to avoid the lengthy process of buying through agents. Ask on Facebook groups if anyone is selling their home, or even visit local community events and ask people face-to-face. You may also entice sellers to sell privately to you by avoiding agent fees, which can be costly and time-consuming. Motivated sellers are everywhere, you just need to find them!
Work with local estate agents
Working with local estate agents is one of the best ways to build meaningful and mutually beneficial relationships. For instance, if you get friendly with an estate agent at your local agency, they may have a handful of properties that they are struggling to shift. You can work with them to convince the vendor to bring the price down a reasonable %, and purchase once everything is agreed upon. Now, the vendor has a sum of money to leverage, the agent gets their sale commission, and you get your BMV property to do what you wish. All parties win. Pop into your local estate agency, or connect with agents/directors of the agency and LinkedIn and drop them a message.
Property that has been on the market for some time
Finding a property that has been on the market for some time is another great way to negotiate with the vendor and the agent. Set your filters on Zoopla/ Right Move to the oldest listed property in the area you wish to invest in, and find worthwhile comparables. If you find a property within a proximity that has sold for significantly more than what your property has been listed for, get in touch and offer the vendor a quick sale for a % discount. If you can make a cash offer, this will also be more attractive to the agent and seller, but don’t rush into this. On your first BMV investment, you need to leverage your funds as much as possible to prepare for any unexpected expenses.
Final thoughts
To conclude, finding BMV properties is possible with the right knowledge and, more importantly, determination. With property, it’s not just what you know, but it can also be how you know. Getting the right education about investing is the first step. Then, you need to put yourself out there and network with the right people. You’ll find the right deal, you just need to be patient. Happy investing!
