10 Investing In Real Estate Tips
10 investing in real estate tips for the new or experienced investor are in this well informed article. Investing is an art and only the very knowledgeable can be a success. It is not a business to try and dip your hand in. It is a business that takes lots of money, much of your time and patience. Do you like dealing with tenants? If not, then don’t even think about investing in real estate.
- Educate, Educate, Educate. It is literally impossible for a new real estate investor to be successful without knowledge of how to invest, the prices to pay and the art of successful negotiation. The first step is to find a guru, join an investment club or research online for valuable tips.
- Know the Market. Homes selling in Compton, California will not sell for the same price as a small bungalow in Alexandria, Kentucky. Alexandria is a beautiful town with safe streets and easy life and a home there will sell for 1/3 of Compton and yet Compton is an undesirable place to live for most. Compare prices and know your market when investing in real estate.
- Cash Talks. When there are multiple bids, a cash bid will be accepted ten times more than a offer contingent on loan approval. Cash offers will go throw smoothly and will have very few problems. When investing in real estate, use cash.
- Never Promise Your Loyalty. Many failed real estate investments come from depending solely on one Broker for everything. Brokers who are successful may be extremely busy also. Invest smart and invest wisely with a multitude of choices. The golden rule should be “whoever brings the best deal, gets my business.”
- Finding the Perfect Property Takes Time. You have the money, you found a guru to represent you and now you want the property. You are anxious and have the cash. Wait, stop and think. A good investment does not happen over night. Put out your feelers with all the Brokers in your area and bank REO departments and deal with the right property with cash flow of 10% or more.
- Due Diligence. After finding the “so called” perfect property, you must use due diligence or research the property thoroughly. Never take for granted a net sheet given to you by the seller or even your own broker. Insist on a title report and comparables of recent sold listings and search for the reason the property is being sold in the first place.
- The Art of Negotiating. Whether you are buying a condo or a 25 apartment complex, knowing how to negotiate is key to winning the bid. Never say no and never act too excited when bidding on real estate investment properties. Never insult the seller by offering too little and learn how to have patience while he decides. It is better to walk away from a property where the price is not what you want to pay, then to reduce your required cash flow.
- Knowing When to Walk. Escrows are meant to be broken if the deal is not at all what you were promised. Hopefully, your real estate contract stipulated you had a right to cancel escrow if the home inspection report was not acceptable, appraisal did not come through or the property itself was not what it was stated to be, such as a good investment.
- Managing the Properties Yourself. Most investors manage real estate investments themselves. It saves money and time. Being in complete control is always better in the long run. Investors of real estate need to know exactly how the money is being spent and that the money is being spent wisely.
- Flipping Properties. Flipping properties is done when the investor is interested in making a profit quickly. Real Estate Investment Clubs will never flip a property (buy and resale immediately after repair) and many investors will not either due to the possible tax liabilities. The IRS can decide when an investor is a “Flipper or a Dealer.” A flipper must pay higher taxes and thus have less of a profit.