Goodwill Property Hunting is a clever real estate term humored into existence by the Hausples team during a particular daily huddle, when their discussion somewhat touched on the Bird Dogging topic. However, due to its negative connotation, the team at Hausples reworded to Goodwill Property Hunting..
So the term actually refers to the art of seeking out good deals on behalf of an experienced real estate investor, and the one doing this job is known as a "Goodwill Property Hunter".
The key responsibility of a goodwill property hunter is to identify properties that have great investment potential, yet are in a distressed state or are underpriced, and suggest these properties to an experienced real estate investor.
If this suggested lead appears compelling to the investor, in this case, he/she will proceed to close the deal and the goodwill property hunter, on the other hand, earns what is called a finder's fee, commonly known as a commission. Figuratively, the goodwill property is the potential investment itself, in a goodwill property hunter's looking glass.
All things considered, it's rarely uncommon to find that a majority of these goodwill property hunters are actually real estate agents or brokers, who have decided to explore the real estate investment side of things themselves, given their solid experience in real estate.
The pinnacle of goodwill property hunting
As a rule, the pinnacle of goodwill property hunting is to search for property deals that have more than 90% chance of translating into a profit, normally on behalf of an experienced property investor.
Ultimately, goodwill property hunters zero-in on foreclosures and repossessions by banks, otherwise referred to as distressed properties, offered at a bargain price.
In most cases, distressed properties imply those that are in a state of despair, or rundown, yet have huge profit-making potential, if you understand the fix-and-flip and BRRRR strategies, to say the least.
By now, you might have noted that goodwill property hunters bear all the legwork in hunting potential profit-making properties; a good deal struck, is a deal worth living for.
Goodwill property hunters, unlike property buyers and newbie investors researching online real estate portals and listing agents, either drive around - if travelling permits - or engage online searches with vetting ideal property deals in mind.
What this means is that a goodwill property hunter is in the business of affording well-educated and well-informed decisions once they come across an investment deal that can turn into a successful purchase.
The pros and cons of goodwill property hunting
Light is to darkness what the pros of being a goodwill property hunter is to cons; in the presence of one, the other disappears.
So, as the narrative follows, here we’ll consider a few benefits and drawbacks of goodwill property hunting, before you contemplate being the first to practice it in PNG’s real estate market.
(a) no risks involved in investing
The real estate industry is an amalgamation of wealth building possibilities and income generating strategies, yet this is not to say that success doesn't come without risks and sacrifices.
Naturally, goodwill property hunters scout good investments on behalf of someone else (an investor), and not the other way around.
Hence, they bear all the underlying risks, even though they don't or aren't required to invest any money, other than their time.
So, from this point on, the risk of wasting their time on nothing more than a bad deal is always a step away. All the more, there are instances where a goodwill property hunter eventually converts to an investor.
But, typically, the journey to becoming an investor begins by doing all the legwork of property hunting until such time where they feel they're experienced enough to become an investor.
(b) learning on the job is a given
Because just like any other role, whether you’re qualified or not, it’s all learning as you go along, and goodwill property hunting isn’t excluded.
On the job, you begin to learn the ins and outs of goodwill property hunting such as which properties reflect good investment deals, and which ones make great statements, and which suburbs are superior in terms of lead generation and conversions, etc.
Ultimately, since goodwill property hunting is a commission-based role, you need to know what you must know.
Another factor that gives nod to the point above is your enthusiasm for the job. Once you get down to the bottom of what you need to do and can do, while enjoying the thrill of it, then instead of fruitless deals and criticisms discouraging your progress, they fold beneath your feet as building blocks to harken your success.
This will precede the need to build your investor network, as well as having in mind building funds for your own investment property.
In contrast, if you find this role unappealing, or does not make sense to you, it's all right because there are low-risk ways of getting involved in real estate, such as investing in REITs.
(c) an outright chance to develop your own property investment business
In spite of everything else, if you're currently hunting deals as a goodwill property hunter, knowingly or accidentally, the chances of you morphing into a key real estate investment outfit are just too great.
But this will revolve around your source of inspiration and how badly you want to succeed in the sphere of real estate, as a whole.
After all, with respect to turning this venture into a complete real estate portfolio, you will find yourself working with more than one investor. But this shouldn’t be a deterrent because competition is customary, as it is with every other business ventures as you positively expand your goodwill property hunting reputation.
The endgame is that your job becomes much easier when you're searching for different properties for a number of your investors. Example, the origins of your goodwill property hunting career might have begun in residential real estate, scouting single-family leads for your investor.
Then as you progress in your career, your focus starts to expand; from single-family homes to multi-family rentals in matching individual investor criteria. Again, all this will solely depend on your goals in this trade, and may be the offshoot of your experiences.
(a) goodwill property hunting isn’t a simple feat
True, from afar, an experienced goodwill property hunter will make it look easy, but it’s actually not. With every viable lead that you generate, there's at least one or several you'd have to disregard.
Although, you don't get to invest any money other than your time, you only get your commission once the deal(s) you generate are closed - this may take an awful lot of time, and will even test your patience.
Another drawback, and one that requires ingenuity to stay on top of your competition, is that you may not be the only goodwill property hunter in your locale. There are bound to be others who will give you an excuse to swim against the tide.
(b) there are risks involved
As with every job, a commission-based position like a real estate goodwill property hunter comes with laughter and sadness. Of course, with laughter, you don't get to invest a toea. However, if you don't find a good lead for your broker or investor, and you don’t do patience very well, you might want to consider selling buai and five toea loose instead.
For the most part, a regular salaried position is not as exciting or lucrative as a commission-based job, unless you're all about stability.
Because with goodwill property hunting, there’s one less reason for sturdiness, but one more reason to be fluid. Good deals mean getting paid. Other than that, you've got a whole lot of nail-biting and hair pulling days to endure before you see an actual paycheck.
Goodwill property hunting in real estate may be beneficial as a side gig or hustle, but it does have its uncertainties if you're considering working it full time.
Do your research to make sure that the investors you're likely to work with an excellent track record of closing deals, once a potential investment deal surfaces.
It goes without saying that if something looks too good to be true, it probably is. Make sure your terms and conditions are given in writing, instead of a mere handshake, or by implausible words.
Remember, you may not be investing money, but you're investing your time. And in the private sector, time is money.
The relationship between a goodwill property hunter and an investor represents several mutual benefits. Yet again, as with all types of benefits, there are accompanied risks. As light cannot exist without darkness, so do benefits cannot exist without risks.
Moreover, goodwill property hunters risk losing their commission if a suggested lead fails to pan out - despite the fact that their roles do not share the same risks as an investor who concentrates a ton of cash into a Fix-and-Flip or BRRRR investment, and reaps nothing in return.
This article is meant for informational purposes only. Hausples researches tricky real estate topics, interprets them and teaches its readers all about how the industry operates. Therefore, not all articles are intended to be construed as financial, or investment advice. Hausples encourages you to reach out for professional help regarding your own real estate situation.