The answer is: Ugly ducklings in good streets. You need to have a motivated seller and property that is ugly and doesn't appeal to a lot of other real estate investors.
Great buys in real estate are in generally in rough condition. I can count the nice properties on one hand that I got great buys on over the years.
So for you to get the good buys that are out there in this business you are going to need to be in the renovation of property business. You will be rewarded for your efforts if you go about it the right way.
Examples of some great buys are:
a. Weeds two feet high in the yard
b. Gutters hanging down from the house and roof covered in moss
c. Rubbish and litter everywhere
d. Maintenance neglected
e. Out dated kitchens, shag carpet, unpainted walls for 10-20 years
f. Marriage break ups
Some of examples of a great buy:
a. Front yard looks like a car yard: I bought a block of units that looked like a used car yard. It had realy old wrecks of cars parked in the front and that detracted the real value of the property. The carport area was looking very tired and was in need of some tidying and painting up. The agent had no enquiry on this property because it didn't have any appeal at all.
I intend to paint up the carports and render just the front of the building (it is brickwork). Inside what the public could not see was, the whole three units had been refurbished. I will strata title them and then sell them off individually. I plan to double my money in twelve months.
b. Run down and lack of maintaince: This property really in need of a spruce up. It was owned by a busy couple who didn't have any handyman skills or any sense of pride in their property. Once again the agent was struggling to move it. A quick tidy up and two weeks work fixing the glaring problems and it will be ready for a new tenant.
c. Animals inside: This property was owned by an elderly lady who lived on her own with a pet dog. The dog lived in the house as well and the carpet was covered in stains and smelled horrible. This was putting people off straight away. A good airing out and new carpet also painting to clean up all the dog's scratching on the walls and doors got this property back in shape.
Real estate investing requires hard work but the rewards can be great. There are some great buys in real estate but it requires investors with talent to restore the properties to a state that will attract quality tenants. Doing real estate investment renovations, and getting them back to a quality standard, is for me, part of a process of fulfilling the dream for homeowners and is what I love most about this business. The investors who can see the potential in the ugly ducklings and have the ability and resources to restore them will always make money in any type of market.
If you are new investor, I recommend you focus on the lighter rehabs, paint and carpet changes to start with.
Some of the examples above were light rehabs they just had obstacles that others could not see past. If you start out slowly till you get your confidence you will be okay.
To your investing success
PS If any of your family or friends are interested, please pass this on to them.