These are seven great tips for making more money with investment property. Take it from an experienced property investor who’s gone before you.Or for many of you who have property investment experience, I’m right there with you in the trenches.
Pitfall #1: Listening To The Real Estate Agent’s Recommendations
In most cases, there really shouldn’t be a real estate agent involved unless you’re attempting to purchase bank owned homes.But let’s say there is one.Here’s my advice to you. Know than when a real estate agent gets involved in the investment property situation.
The price always goes up.
Whenever a real estate agent has been involved, the property information I recieved has been very unreliable.Never trust the information and always verfy everything yourself.
Pitfall #2: Dealing With An Unmotivated Seller
With the current over supply of foreclosures, bank foreclosed homes and REO’s in today’s real estate market, you will more than likely have more close encounters with real estate agents. Most of them don’t know what we need as real estate investors, therefore they really can’t help us.
If you’ve purchased pre-foreclosure properties in the past, you already know you should only be dealing with motivated sellers. Motivated sellers have compelling reasons to sell such as divorce, job loss, prolonged illness or drug/ alcohol addiction.Your goal should always be to help these people out of these difficult situations.
Pitfall #3: Not Having Your Exit Strategy In Place In Advance
This is part of Real Estate Investing 101, but for some strange reason, many investors fail to learn this lesson.It’s like sitting down on the toilet and then realizing there’s no toilet paper lying around.We seem to get the order mixed up. Have your exit strategy in place BEFORE you put a nickel down on a piece of investment property.No matter if you plan on selling the property to an end buyer or renting it out for long term cash flow and capital appreciation – begin with the end in mind here.
Pitfall #4: Not having Your Funding In Place
Show me the money. That should be your montra for this little pitfall.If you have a solid business relationship with a local banker, take the time to make it even stronger.You need to be able to turn on that financial faucet when you need it.If you don’t have an established banking relationship, take the time necessary to cultivate one.
Pitfall #5: Over Paying For Investment Properties!!
If you’re paying more than $.50/$1.00 (that’s fifty cents on the dollar) for your deals in today’s market, you’re paying too much.investment properties at deeply discounted prices}. If you pay too much you’ll be working for free.Don’t go there – do the math and the math will tell you what to do.
Pitfall #6: Buying In High Crime Neighborhoods
Some houses that seem cheap end up becoming very pricey.If you wouldn’t send your wife and kids into the neighborhood, I wouldn’t recommend you invest there. I’ve made this mistake and trust me, it’s a lot of unnecessary work and hassle. And get ready to put your track shoes on because you’ll be chasing a lot of rent.
Listening To The Wrong People
If you’re just getting started, pay close attention to where you get your investment advice.The most expensive advice is always free.Free advice is always very expensive.If you’re going to listen to someone, make sure they know what they’re talking about.
Tags: Bank Owned Properties, investment property, investment rental property, pre-forclosure, property investor