How to make INSTANT PROFIT with Real Estate

What's up you guys? It's Graham here. So, I understand this sounds like a very intense claim to say that you can make money immediately in real estate, especially when on this channel I preach investing in real estate is a very long-term plan. But there is a saying out there that goes something like this: you make your money when you buy, not necessarily when you sell. And there is a lot of truth to this.

When it comes to this, how much profit you make ultimately comes down to how much you bought the property for. If you overpaid for the property, that obviously then means less money in your pocket. I've used that sort of thinking every single time I bought a property. For instance, last year when I bought a duplex, I ended up making $85,000. That was a terrible snap; $85,000 the second I could snap on this finger, the second I bought at $85 grand in equity.

And this year, I came ahead about $50,000 the moment I closed on this year's duplex. So in this video, I'm gonna be sharing my exact strategies to scoring the best deal and how you can make instant money. That was a better snap when it comes to real estate. These strategies are gonna work whether you're an investor looking to make a profit, or you're just someone looking to buy a home to live in. Either way, it doesn't hurt to make a little extra money.

Also, it doesn't hurt to smash that like button if you haven't already. But really quick, I just want to give a huge thank you and shout-out to our sponsor today: Skillshare. Skillshare's an online learning community with thousands of classes on business, finance, real estate management, and just about any other entrepreneurial topic you can think of.

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So when it comes to making instant money in real estate, here's what I mean: it means that you can buy a property for less than what it's worth by knowing exactly what to look for. For example, if a home is worth $500,000, but you go and buy it for $380,000, well that means that you just made an instant $120,000 in equity the moment you purchased the property.

However, when it comes to actually doing this, very few people know what to look for, and because of that, that's why I'm making the video. Trust me when I say this: you can find these deals in any single market out there. Whether it's a buyer's market or a seller's market, there's always going to be market inefficiencies that you could spot and locate and then profit from.

Without further ado, these are the best opportunities that you can find. The first thing is to look at homes that have been listed on the market for over a hundred days. Now, this might seem a little bit counterintuitive because the deal has been listed for months and like everyone has seen it already. But because it's counterintuitive, you could start using this to your advantage.

Remember that in order to get different results than most, you need to take different actions, and this is definitely one of them. As a real estate agent, this is something I see happen way too often: if the seller wants to sell their home, they're gonna interview three, four, or five different real estate agents. But many times, they end up listing with the agent who simply tells them the highest price possible just to try to get the listing.

Naturally, what ends up happening is that many times, the seller will just go with the agent who tells them the highest price because the seller thinks they know something that every other agent doesn't and they can get more money. Now obviously, what ends up happening is that the home is listed, but it doesn't get any activity or any offers in the first month.

The listing agent then goes to the seller and says, “Listen, we need to drop the price to try to attract a buyer.” The seller then reduces the price to where it should have been all along, but because the property has now been listed for over a month, they've lost all that initial momentum that they would have gotten had they just listed at that price from the very beginning.

Most buyers by that point have the mentality that, “Oh, if it was already listed, there must be something wrong with it. It must not be that good of a deal, so let's not even bother looking at it.” Instead, let's look at the brand-new listing over here that just listed like four hours ago. So because of that buyer mentality, maybe another month or two goes by, the property still hasn't sold.

The listing agent goes back and says, “Listen, we don't have any activity, we don't have any offers, we have to drop the price a little bit more because the market obviously says that your home isn't worth what we're listed at.” Then what happens? They end up dropping the price again. Now all of a sudden, it's listed below what the home is worth, but because the home has now been listed for a few months, buyers have that same mentality that there must be something wrong with it.

It must not be that good of a deal; it's been listed for over a hundred days. Now, even though in reality, if they listed at that price in the very beginning, they would have had multiple offers and it would have sold over asking price.

Now, from my experience as both a real estate agent and real estate investor, when a home has been listed for over a hundred days, it has a very hard time selling. The mindset for 99% of the buyers out there is that there must be something wrong with it because it's been listed for so long. Now, as a home buyer or real estate investor, it's your responsibility to understand the market dynamics and market conditions and understand what a property is really worth beyond how many days it's been listed on the market.

Typically, the sellers of these homes that have been listed for over a hundred days are not always, but many times very desperate to sell. So my recommendation here is to check all homes that have been listed for over a hundred days and see if you might be able to spot something that's under market value or just feel free to write a much lower offer on a property that's been listed for over a hundred days.

There's a small chance the seller is going to be very desperate to sell, and also the agent on that property is going to be very motivated to help push your offer through because they've been working at it for months and they want to get paid. Doing that is just a tremendous value to buy a property under market value that many other people simply just don't even look at.

Now, the second one is the one I take advantage of the most when it comes to buying real estate for myself, and that's buying listings that have very, very bad pictures listed online. Now, one of the reasons why I was able to buy last year's duplex for $85,000 below market value is because they only used one picture on the listing.

The picture that they used was a picture taken from a cell phone of a computer screen of a picture taken with a cell phone of Google Streetview. I see this happening all the time, especially when it comes to investment properties. Many agents are just so lazy that all they do is take a screenshot of Google Street View, and that's the only picture they put on the listing.

It's insane! This makes absolutely no sense, but they do it all the time. I've seen so many listings out there that only have one picture available of the outside of the property. Guess what most buyers think? Their mentality is, “There's only one picture; it must suck on the inside. Let's not even take a look at it.”

The reality is that probably nine out of ten buyers out there are very visual. They want to see every single room from every single angle, and if they don't have all the facts from the very beginning, they don't even want to waste their time or even bother looking at it.

But here's the thing though: pictures of a property don't dictate what the home is worth. The home is always gonna be worth exactly what it's worth, regardless of how good or bad the pictures are. But in terms of what you can actually buy it for, the less competition you have when competing with other buyers means more leverage you have, and the more leverage that you have means that the lower the price you can buy the property for.

Now, most of the deals that I bought for myself were bought because of very bad pictures that other buyers just wouldn't even look at. Because of that, I have much less competition and I could be much more aggressive when it comes to writing a lower offer and getting a better price.

So this means that, in addition to focusing on listings that have been listed on the market for over a hundred days, focus also on listings with no pictures, one picture, or very bad pictures. When it comes to doing this, evaluate the worth of the property by driving by or seeing it in person, looking at the square footage, the lot size, the bedrooms, the bathrooms, the floor plan, everything else that goes along to it that actually gives value to a property—not just really bad iPhone pictures.

Many times, I promise you, you will find the perfect home that's hidden behind very bad photography. The third thing you want to look at is look at properties that have very little information listed about them. And like I mentioned in the last few examples, this has more to do with the seller using a very bad, ineffective real estate agent than it does on the actual property's real value.

For example, here's one little trick I've done that many people don't seem to realize, but this is what it is: many real estate agents who don't know the square footage of the property and who don't want to get it measured because they're too lazy simply leave the square footage blank. When they do that, it shows up as zero.

Why they do this instead of just looking on the public record or looking at the blueprints of the home is just beyond me, but it happens all the time. What ends up happening for 99% of the buyers out there when they're searching for a home online is they put in a minimum square footage.

Just think about this for you as well: the last time you looked at a home, chances are you put in a minimum square footage. This means that all the homes that were listed as zero square footage don't even show up. The only way these listings show up to any buyers is if the buyer does not put in a minimum square footage or they put zero as the minimum. And that's basically when the properties show up online, which let's be real, most buyers out there don't put zero as the minimum square footage.

I've also seen listings out there that somehow don't put the correct bedrooms or bathrooms, they don't put the correct lot size, they don't put any description in the property, and they combine that with using really bad or even no photography. It's absolutely crazy how bad some real estate agents are.

Again, what most buyers usually end up doing is just passing on that. They don't even want to see it, even though beyond all that it could be the best home in the world. So I highly recommend: always look at these properties. These are your opportunities.

And I'll repeat that: these are the ways for you to make money. So anytime you see bad pictures, anytime you see no description, anytime you see zero square footage, anytime you see anything wrong with the listing, I want you to start thinking to yourself, “This means money.” Just think about that for a second: there is no way in hell that that listing is going to sell for its full value when they don't use any good pictures, no description, and zero square footage.

Compared to that exact same listing where they would use great pictures, put in the square footage, put in the description, all of those things really end up boosting the property's value. If you put those two exact listings together side by side—one did it wrong, one did it right—I promise you there would probably be about a 15% difference in selling price between the two.

This means that there is your opportunity to buy a property for 15% less than had they just done it the right way from the very beginning, and that is a great way to make instant money and buy a property that's undervalued. The fourth one is a big one that many people also pass up, and that is to buy a very ugly-looking home.

Look for properties that have old kitchens, maybe they have a disgusting old bathroom, maybe they have dirty carpet, peeling paint, bad landscape—maybe it just doesn't look that good. All of these things can be fixed extremely easily, very inexpensively, and very quickly.

Now, even though yes, this is going to cost you money and time to fix up, usually doing this is the best ROI you can ever get when it comes to real estate—is simply fixing it up and remodeling it. From what I've seen, probably about three out of four buyers will pass up on a home that requires any amount of work whatsoever beyond just painting.

Why this is a big deal is beyond me; it's very easy to fix. But that's the reality, and you need to understand that and then use that to your advantage. But again, this just means more money for you if you're willing to overlook these things and do some of the work yourself.

From my experience, whatever you spend remodeling a property should at least double your money in terms of equity. For instance, if you spent $20,000 remodeling a kitchen, ideally that would bring you back about $40,000 worth of equity. Now, of course, sometimes it's gonna be a little bit less; sometimes it might be a little bit more, but on average, that's about what I look for. If I spend money in a property, I at least just want to double my investment, and this is something that I've done with every single property I've ever bought.

For example, the first property that I ever bought, I bought it for about 20% below market value by using these strategies I've mentioned here. They ended up listing the wrong square footage and using only one really bad cell phone picture of the outside of the home. Now, it turns out the reason they didn't show the interior of the property is because the seller was a drug-addicted hoarder. So, I mean that kind of ended up making sense that they wouldn't take any pictures of that.

But, you know, it doesn't matter to me. Of course, when I bought the property, it smelled legitimately like had poop and you could barely breathe. But with a dumpster, a few workers, and $12 grand later, the house was and span as good as new and looked amazing. That $12,000 that I spent renovating and fixing up that property was easily worth $30,000 in extra equity.

In conjunction with that, because I bought the property for 20% below what it was actually worth, I pretty much was able to double my money and my investment on that property within about a month. Also, for the last duplex I bought, I spent about $80,000 and two months fixing it up, and after that, when I was done, it was worth about $150,000 more.

For everyone, it just gets a little bit triggered now. It's like, “But Graham, that's not really money in it; that's equity.” Well, you know what? I did a cash-out refinance on this deal earlier this year. I pulled out $150 grand. Seems like pretty real money to me!

So anyway, the moral of this story is just be okay with doing some of the cosmetic repairs because whatever money you spend on the property is usually a very good investment. Now, when I say this, of course, it's very important to keep it minor and really keep it cosmetic. As soon as you get into tearing down structures, rearranging floor plans, adding square footage, or doing anything major, usually it becomes a lot more time-intensive, a lot more capital-intensive, and you really gotta understand exactly what you're doing.

When it comes to me, and most other people out there, I really recommend just keeping it very simple, very cosmetic—something that you can ideally get done in less than two months. Ideally, you want to be under 45 days where the rest of the home is just amazing. It's just cosmetically, it looks a little... yeah, that's really the best deals to go after in terms of the amount of money you spend versus the amount of time you spend making money.

This is also a great way to buy a property for less than what it would cost you to buy that same property with all the work already done. When it comes to doing this, the most important thing to remember is that you can basically make your money twice.

Now here's what I mean. First of all, you can find one of those deals and buy it under market value by using some of the strategies I described. Second, you can make more money on top of that by doing a lot of the remodeling yourself. This is really just about double dipping on your profit that you make—profit immediately when you buy it, and also when you fix it up.

A little bonus tip here for everyone else who stuck around is one other thing you can do is look at listings that have expired. Maybe listings that were listed for like six months, they didn't sell, they took them off the market—they haven't sold yet, they haven't relisted yet. Oftentimes, these sellers still want to sell; they're just very frustrated about the selling process. They don't want to deal with it.

Many sellers are just like, “You know what? I'll try again next year. It's not a good time. I don't want to have to go through this all over again,” so they take the property off, even though there are still realistic sellers. Now, what you can do to make money from this is approach these sellers and then make them an offer that's a little bit lower, simply for the convenience of not having to go back on the market again and relist and deal with all the showings and everything else that comes with that.

They will be selling their home off-market, and usually because of that, you can get a slight discount. And with that said, that's pretty much all there is to it. It's really about understanding your local market, understanding market inefficiencies, and then understanding how to spot them.

By using those five techniques that I just mentioned, I promise you'll be able to find a great property, buy it for less than what it's worth, and make instant money by doing so. Yes, this takes a lot of time to do this. It's definitely a lot of work to do this. It's definitely a numbers game. You will go through a lot of properties that just don't work whatsoever.

But if you stick with it and you find the one that does work, I promise it's 100% worth it. So with that said, you guys, thank you so much for watching. I really appreciate it. If you watched it to the very end and you haven't already, smash that like button! Make sure to smash that like button, smash that subscribe button, smash that notification bell.

Also, feel free to add me on Snapchat, Instagram—my poster pretty much daily, so if you want to be a part of it, feel free to add me there. I also have a private Facebook group in the description for anyone who's interested in real estate, goes to investing, real estate agent, seeing real estate wholesaling, mentoring, or anyone who wants that link in the description. Thank you again for watching, and until next time!