How to become a successful real estate investor
Many people dream of becoming a real estate investor, but not everyone has what it takes. If you dream of becoming an investor, here are several important questions to consider, long before you buy your first investment property:
1) Why would a homeowner sell a house at a bargain price?
Many things happen in people’s lives that suddenly make their home a burden. Loss of income, divorce or illness are the most common, but sometimes a homeowner dies and leaves behind a house that none of his heirs want. In any case, housing has become a problem, which is where you come in, as an investor. The owners, or the heirs, have a problem, and you must find a way to offer them a solution.
2) What types of houses should you look for?
In addition to being owned by someone who no longer wants or can’t afford to stay in a property, you want to find a home that is just worn out and doesn’t need structural work to compete favorably with similar homes on the market. We call that type of house a “doghouse”.
3) How do you find doghouses?
Your real estate agent can scan MLS listings for fixer-upper homes, handyman specials, or as-is homes. You can also find similar properties yourself, using the local newspaper or buyer.
4) Should you try to close quickly?
This is an important step to success, because beleaguered sellers will almost always need money in the shortest amount of time. Get prequalified and preapproved for a loan so you can close on the property quickly. Being able to let sellers know that they will be paid quickly will allow you to get more homes than your competition.
5) How do you flip houses fast?
Find ugly houses, in good neighborhoods, that need as little work as possible. Clean them up, paint them inside and out, and install new carpet in a neutral shade, and you should be able to turn the house over in no time. Always keep in mind your limitations. Hiring professionals for repairs will reduce your profit margin.
Asking yourself these questions will help you start your real estate investing career, and keeping these answers in mind at all times will prevent you from making costly mistakes when buying and selling investment properties.
(c) Copyright 2014, Jeanette J. Fisher. All rights reserved.