If you are a real estate investor, chances are you aren’t the only one in your neighborhood. Most people think having competition is bad and that competitors are the enemies, when this really shouldn’t be the case. In fact, you can even cash in on your competition if you know the right way.
Working with your competition can highly help your business. Not only you can create partnership to find better deals, but you can also cash in on your competition, especially if they work with notes. Real estate notes are documents created when two parties agree on a transaction. Most real estate investors don’t really know how notes work and how they can use them. This can be your big financial advantage. Selling notes once the interest rate changes can bring you a high amount of profit.
There are a lot of ways to find out about the state of your market and how other buyers find and fund their notes. Often times, it’s enough to be kind and simply ask them. Talking to people can help you learn a lot, and the more you learn, the more you can profit later. Of course, not all investors are willing to cooperate. That’s why it’s important to create a win-win situation for everyone. Here’s how you can make the best situation for everyone.
Buy or Sell from Competition
Buying notes is always a good way to cash in on your competition, while they are also profiting. In the end, most investors buy notes to resell them and don’t plan on keeping them. If you think the interest rate will change and you’ll be able to profit later on, don’t talk too much and try to purchase it.
At the same time, if you have too many notes to handle, put them up for a sale. A lot of real estate investors will look for mortgage notes to buy, so this is a nice way to quickly make a bunch of cash, while keeping good relationships with your competition.
This doesn’t have to be a tactic just for notes, as well. Buying or selling properties to other real estate investors can also be useful, as this is a nice way to get your hands on a fine property, or to find a quick buyer yourself. Real estate investors’ portfolios are often a place where you can find some great properties. Just make sure you have a profitable plan .
Typically, note buyers buy only a portion of notes they are offered. This means that they know where bunch of notes for sale are. Having a good relationship with your competition is a great way to get referrals and to find out where to buy notes. Of course, you also have to know how to determine whether or not the note is worth buying, but it’s a start.
Once again, the same goes for houses. Sometimes, real estate investors will turn down a good deal because of various personal reasons. If you have a good business relationship with them, they may even refer you those properties.
Make them Your Financiers
Often, note buyers will simply purchase notes to ensure cash flow, and they won’t ever think about the potential of improving them. This is why a lot of investors will readily loan against notes instead of purchasing them. This way, you can cash in on your competition by making them your financiers. They will be glad as they will get the note you desire, and you will get profit.
Many investors will be glad to joint venture with you when it comes to purchasing notes. This way, you can work together and learn from each other. If you are just starting out, this is a nice way to get your insight about the business. Working together with another investor is a great tactic to learn a new technique and to become more creative. Also, you never know when someone may be there to help you. It is better to have a partner than an enemy.
Improve Notes Together
Around half of notes can be improved at a short period of time, only if you know how to do it. This is where the true money lies. Now that you know that, you may decide that buying notes is not worth it. A lot of investors will create partnerships with their competition to create joint venture the improvement of the notes. If you make a good agreement, you may be in for a big profit. Your partner won’t lose anything – quite the opposite, you both may earn. Try creating a deal where you’ll split profits, then find a market yield and share the profits, whether via cash or cash flow.
Taking any, or all, steps from this list can help you cash in on your competition, while remaining friendly with them. Understanding your competition and working together with them is the key to becoming successful. Most real estate investors look at competition as enemies, but it shouldn’t be that way. Other investors shouldn’t intimidate you and you should never look for a way to bring them down.