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 make their home suddenly become a burden. Loss of income, divorce, or illness are the most common, but sometimes an owner dies and leaves behind a home that none of his heirs want. In any case, housing has become a problem, which is where you, as an investor, come in. The owners, or the heirs, have a problem, and you must find a way to offer 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 homes in need of repairs, 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 succeed, because embattled sellers will almost always need money in the shortest possible time. Get pre-qualified and pre-approved for a loan so you can close on the property quickly. Being able to let sellers know that they will get paid quickly will allow you to get more houses 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 down, paint them inside and out, and install new carpet in a neutral shade, and you should be able to turn the house around 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 jump-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 property.
(c) Copyright 2014, Jeanette J. Fisher. All rights reserved.