To be a highly successful real estate investor you should pick a niche and become very familiar with it. For example, some people choose probates, some people do foreclosures, and others do expired listings.
Personally, I focus on tired landlords. Why? Because in order to make an awful lot of money you have to know your niche and you have to thoroughly understand your customer.
And I’m a landlord who owns multiple rental properties.
When I first started out in this business I didn’t know anything about landlording. I made a ton of mistakes and had houses severely damaged by bad tenants in the process. One of the worst calls I remember getting was from a neighbor who said “Jason your house is on fire and the fire department’s here.” My tenant had left a candle burning on the mantle and it had fallen over. Luckily, there was very little damage to the place.
My point is, I know what it’s like to be a tired landlord who wants to get rid of a nightmare property or who’s stressed out from tenants.
And this simple fact of being able to relate to my customer helps me close a heck of a lot of deals. For example, when I’m writing a direct mail letter to a landlord I know exactly what to say to them so they’ll pick up the phone and give me a call. When I’m sitting with a landlord at his kitchen table and he’s talking about how his tenants ruined the brand new carpet he put in, and they haven’t paid rent in months, I can tell him I understand where he’s coming from.
But what if you’re just starting out and don’t own rental properties?
Well… go buy some. Every investor should have rentals in their long-term ‘buy and hold’ portfolio. It’s the best way to become wealthy as a real estate investor. Flipping properties will never make you wealthy, but owning 10 houses free and clear with passive income coming in every month will.
But again, if you still don’t own a rental yet, I think you should still target tired landlords today. One of the main reasons is because there are a lot of them out there. When the market was hot four years ago, 25% of properties purchased were rentals.
Also, as I’m sure you know, most landlords are amateurs and give up on this business very quickly.
That means there is always a constant and steady flow of landlords who would love to have an investor like you take their rental property off their hands.
Lastly, landlords aren’t emotional about the properties. They haven’t spent the last 25 years raising a family in the house so there’s no emotional attachment.
In short, I recommend that whatever your target market is, you get to know it really well. And if you haven’t found a niche you love yet, I’d definitely consider tired landlords.