When it comes to making a real estate investment, it’s important that you arm yourself with the information you need to make a wise and informed decision. The following tips will enable you to hit the ground running.
• Knowledge is power – if you think education is expensive, try ignorance. It’s tough to get leads in real estate, therefore, when a motivated seller calls you, you should know as many different ways to buy a house as possible. In my career, I’ve had many successful and profitable real estate transactions from sellers who had conversed with other investors prior to me that couldn’t help them. Don’t miss out on potential sales because you don’t understand how to sell a house with little or no equity.
• The latest technology – The Internet can be your best friend when searching for houses to buy, so remember to use the net to check out homes and neighborhoods. Almost every town has plenty of information online. Research how populated the area is and what its unemployment and salary rates are before making any purchases. This will ensure you’ll be making the money you need to when living in the area.
• Focus on the most motivated – Be alert to homes that are in mortgage default and about to be foreclosed on. You may want to consider properties in pre-foreclosure if you have ample time for locating a worthy property for investment. Pre-foreclosure properties are properties in which the owners have fallen behind in their payments and are at risk of having their home foreclosed on. You can advertise your own willingness to purchase houses with cash, or consult lenders to get lists of properties approaching pre-foreclosure. Whichever method you use, when you’re talking with the person who currently owns the property, you need to discover how much he or she owes, and offer this person potentially several thousand dollars over that amount. You will discover that you will get a great deal because most owners owe less than the property’s market value.
• Go clubbing – Real estate investment clubs are a great way to find potential buyers or sellers for your properties, depending on your strategy. It’s also a great way to meet other real estate professionals whose services you may someday require, such as lawyers, contractors, mortgage brokers, REALTORS®, title agents, appraisers, etc.
• Hire your own professionals – You may think it would be easier to just utilize the inspectors or appraisal professionals selected by the seller, but it will hurt you in the long run. No one likes spending money on something they could get for free. Nevertheless, it is good to hire individuals that you can truly trust. A house is an expensive investment with a great potential for riches or failure; getting the real truth now can save you a lot of money in the future.
• Just the facts – Do not let other, intangible factors influence how much you pay for the house. Don’t be influenced by what you think the appreciation may be or the fact it has a view. Not everyone sees things the same way as you do. Even though you may love the view, when you resell the house, there is no guarantee that prospective buyers will value it as highly as you do.
• Seek advice – Ask each potential real estate agent how familiar he/she is with the area you want to live in. For example, ask how long he/she has lived in the general area you’re looking at. For those unfamiliar with the area, advice about the roads or neighborhood itself will be sparse. An agent residing in the area 10 years or more is preferable.
Phill Grove is the Founder and President of Love American Homes.
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