Top Ten Tips to be successful in Real Estate Investing:
1.)Identify your financial resources and determine purchase power
2.)Based on your purchase power, decide how many properties you will buy, at what pace, and whether you will hold and lease them or flip them for profit. (Most investors do both)
3.)Select areas to purchase in that you are very familiar with.
4.)Use multiple resources to identify values like the web and professional realtors.
5.)Create a checklist of costs associated with repairs that may be required or you can use mine Click here.
6.)If you are going to be holding some properties for a long-term gain, decide if you will manage them yourself or hire a professional property management company. (The cost of property management varies between 8-12% of monthly rent)
7.)Know the market! Two years ago you could present low offers and get them accepted – now that the banks are pricing so aggressively and the investor market is flooded, you Will have to bid over asking price in many cases to secure a property.
8.)Know your margins! Based on the work required and your cheat sheet of estimated repair costs (see item 5), you should be able to calculated what the cost of fixing up any property will be.
9.)Decide if the property is one that qualifies to bid on: Here’s the formula –
Resale Value after repairs – Cost of repairs – Your Profit (You determine this value) = Offer price.
10.) If your offer price is less than asking price and the property already has multiple bids, you may not want to bother. If your offer price is higher than asking, and there are multiple bids, offer your calculated price. If your offer price is higher than asking and there are no other offers, you may want to bid full price to secure the purchase.
***** The unwritten rule: Don’t get greedy
If you lose a property that was going to net you $10,000 because you were trying to save $2,000, you’ve lost $10,000. In fact, if you never secure a purchase, you’re not an investor at all. Good luck!
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