There are several factors that can assure your success that if followed will help you begin to amass your real estate fortune:

1. Be Committed – realize that there are properties available below market value but they may be difficult to uncover. If a property is widely publicized, chances are everyone would know about it and it would not be a deal. Finding a seller that is highly motivated may take some time. Realize too, the chances of falling into a “deal” are highly unlikely. Doing this successfully will become a continuous pursuit.
2. Define What You Want – are you looking for investment property or a place to live? Are you looking to rent it or resell it? Your decision will affect the financing you obtain.
3. Reduce Your Expectations – accepting the fact that you are probably not going to find your dream home is important. Many times, distressed properties become distressed since owners have mentally removed themselves from the house and have no desire to continue to maintain it. They realize their time is short lived and the property may slip into a state of disrepair. Also, the number of properties to be snapped up at below market is generally less than what you will find if paying market price.
4. Secure Financing – money talks. It shows that you are serious and mean business. So many times I have seen sellers that will not accept or entertain offers below a certain set price. However, I have seen these same people go through a complete turnabout once someone presents then an offer in writing. Their entire mindset changes.
5. Explore Short Sales & Foreclosures – these are an excellent source of real estate priced below market. Many of these are published either through the public record or the Multiple Listing Service which is easily accessed on our web site. There are also many real estate related web sites that offer this information. The first offer will sometimes be accepted, contingent upon the approval of the bank. A bank may come back and ask for more money to reduce their loss. It will be up to you as your negotiating ability may be put to the test.
6. Stay Firm on Your Price – let your sellers or bank know that you just cannot go any higher on price. Having an understanding of the market with respect to how many houses are in the foreclosure stage, and how long are they taking to sell? Counterpoints like this will be a big benefit to you. Facts will outweigh opinions any day. Also realize that the bank or the home seller needs you more than you need them. Power is a wonderful thing when it is on your side.
7. Know all of the Costs – make sure you understand what the fix up costs will be. How much is PITI? (principal, interest, taxes , insurance) A property may look under priced until you do some analysis and realize that once you pay for the repairs, the rent may not cover the payment. Do not expect the seller to make any repairs. Factor all of this in to your offering price. How much are the rents in the area? You may make some mistakes once; chances are you will not make them twice.
8. Neighborhood is Key – you need to focus your search in areas that have a high concentration of foreclosures. The chances of finding a $400,000 fixer in Madison Heights are slim. So don’t bother to look, it’s just a waste of time. Focus your search where values are soft, where properties are staying on the market for months.
9. Develop a Brain Trust – get some people on your side who do all of these things on an everyday basis. Create relationships with a lender, a real estate agent, a contractor. Let them know you are serious and they can make money with you.
10. Know When to Walk – as with any negotiation there may come a time when this particular property looks less and less appealing. Don’t be afraid to ask for concessions. If the task becomes to overwhelming there are plenty of other properties out there. Just see item #1 above.

Real estate like any other investment can be very rewarding if you are willing to commit yourself and take the necessary steps to properly evaluate a property. Many people make money in a down market. Just make sure you understand the margin for error is much smaller.