Finding the right investment home is often a daunting task. Where would one start? Zillow, Trulia, Realtor.com? While these big real estate portals are garnering tons of attention and traffic, many people are using Google search to find smaller companies selling FSBO. I should know, I started one of them.
While some of our lead generation comes from the larger real estate portals, much of it is organically grown via search or referral business. Both are largely important in a internet world which is fragmented. Taking this a step further, companies like ours have become full service filters. And there are many of them out there. These types of companies are often selling their own properties instead of listing other sellers’ homes. In doing so they usually have filtered through many properties to arrive at the batch they are advertising.
This idea of filtering in the past has been called “wholesaling” because the theory was the homes were available at wholesale prices. The idea of a wholesale price usually means you can buy the home cheaper than retail, but in the real estate investment industry this is often not the case. Companies offering properties by filtering them are usually offering similar homes available on the search portals and often at prices slightly higher than available via a traditional real estate purchase. It’s hard to think of this as a “wholesale” transaction.
Some of these transactions merit the premium prices they are often marketed at (which by the way is still discounted from appraised value). With the premium price should always come premium services. Investor Nation offers select homes by filtering out homes that don’t meet specific criteria. The company than zeros in on homes which make an idea purchase for an investor. Here’s what a filter usually does;
- The investment home sales company combs through many sources including REO’s, auctions, tax sales, online portals, banks, and motivated sellers.
- Home which meet specific criteria are purchased ie: 3 bed, 2 bath, 2 car garage in certain neighborhoods, school districts, etc.
- Due-diligence is then performed in the case of Investor Nation this includes; appraisal, home inspection, construction bids, rental analysis, cash flow analysis, photos, video
- The home is then prepped for sale by pricing it according to methods allowing both the new investor buyer and the company to reach goals
- The home is then marketed usually by digital means
In addition the filter, in this case Investor Nation, offers post sale service to include renovation, renting, and financing. In doing so the filter company has provided a premium service which increases the probability the investor buyer will have a successful experience and thus repeat purchase. The companies or filters provide a concierge or white-glove service which is atypical of a normal real estate transaction.
With technology advancing many people ask my thoughts on the future of business like these (like mine). My thoughts are that businesses focused on consumer needs will thrive in the knowledge age. I’ve found that leveraging technology and new social platforms allows customers to spread the word more easily. Also we’ve found the new property portals and advancement in Google Maps to be a benefit to give our listings more exposure than we could get by traditional MLS methods.
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