Buyer's market, like today's, is always enticing for real estate investors and those who want to become investors. There are opportunities everywhere and sometimes it's hard to focus on the fundamentals that are key to making a profitable acquisition. It's easy to get caught in the atmosphere of abundant supply and then make hasty decisions that turn out less than satisfactory. Let's look at three major areas that I value the most when selecting an investment property.
The house has to be in a basically sound condition. You don't want to replace the roof, do major plumbing work or get involved in a costly window replacement project. All of that is unprofitable work and should be avoided. Cosmetic improvements are the ones that will give you the best returns, like fresh paint inside and outside, new lighting fixtures can make a big difference and smart new landscaping.
Location of course. If the property is in a neglected neighborhood, there isn't much you can do to help overcome that. Stay away from freeways and busy streets. Look for property in areas of well-maintained homes and zero in on ones that are the worst of the street. Those have the best profit potential once they are fixed up to the surrounding standards and even the neighbors will like you for renovating an eyesore.
Motivated seller is my third point. If you're working with an agent, he/she probably knows why the house is for sale. Ask him. Mortgage foreclosure could be imminent, owner has a job transfer, death in the family, divorce, there are many reasons why people are selling. If it's a FSBO, just kindly ask the homeowner and he'll tell you. What about the house having been listed for 120 days? That ought to help elevate anyone's motivation level. Once you find a seller who is willing to negotiate, put your creativity to work and see what happens.
Of course, there are other areas to consider, but these are the main ones I focus on.