TIP #1
There are several tried and true methods to uncover sellers who will literally beg you to take their house. They all boil down to finding a seller whose situation has changed.
For various reasons (such as divorce, death or job conditions), they need to get out from under their home fast. You can often buy these homes for pennies on the dollar, then turn around and sell the property at a much higher market value. That translates into BIG real estate profits for you.
The 'trick' is in finding these sellers. Be paitent and keep looking - they are out there and the rewards are well worth it!
TIP #2
Your rehab project may suffer delays and lost profits due to simple things like a rise in gasoline prices, which adds to the cost of materials delivered by truck to your local lumberyard or home improvement store. A few cents per gallon at the gas pump can be enough to erase your potential profits while you work to rehab and "flip" a property.
Take care to calculate into your rehab cost a 'fudge factor' to include funds for such 'emergencies'. A good rule of thumb is to multiply your estimated rehab costs by .2 (20%) and add that to the estimated cost when you are analyzing a potential project.
If this small addition kills the deal for you, it is probably best to move on to another deal.
TIP #3
Never pay off your mortgage!
As a real estate investor, mortgages are good and not a "necessary evil". You must learn why this is true and how, in the right situation, a second or even a third mortgage can be a good thing.
Mortgages are one of the primary keys to creating wealth through real estate.
Learn how to use financing as one of the keys to create your own financial estate, without concern for it being "risky" and you will see your profits soar!
TIP #4
In every real estate investing deal A LOT of money is changing hands, so you'll need professional contracts that keep you out of trouble and keep your customers happy. There are standardized contracts you can use that cover all the bases.
You also need to organize and structure your business like any other, and there are very smart ways to do that, while maximizing your profits and minimizing risk using proper asset protection and entity structuring methods.
Traditional real estate investing calls for certain qualities, such as a good credit record, a sound financial position, an appreciable income, bundles of dollars for a down payment, and smart lenders by your side. Creative real estate investing provides more flexibility, yet requires more knowledge of how real estate deals are put together. Always seek the advice of others who have gone before you on how to accomplish this with less effort on your part.
TIP #5
All too often real estate investors feel that "A better deal may be just around the corner" and never starts his or her real estate program because they always hope a better deal may be out there somewhere if they just wait...and wait...and wait.
Real estate investing deals do not come knocking on your door and there will always be another one out there! You can only take advantage of one at a time anyway, and the good ones will come to you more often as you have more practice.
Take action and get out there!
TIP #6
When you buy the debt that finances real estate, you participate without having to roll up your sleeves and deal with the nitty-gritty details of rehab work as well as avoid the hassles of dealing with renters and all the other less-than-desirable aspects of real estate.
Those who invest in the loans that fuel projects will always be in demand, as long as there is a market for buying and selling property. And, that is likely to be around for a long time!
Become the bank - that is where the money is!
TIP #7
Before you purchase that first real estate property, think about what you expect from your investments, just what are your overall financial goals?
Be sure to analyze the profitability of the investment carefully before getting started in any real estate transaction. If the investment returns do not meet your expectations, go on to the next one.
Real Estate success is based on solid decisions rooted on fact and financial analysis, nothing else. You must learn to take the emotion out of the deal and simply buy and sell because the deal is right for you as it meets your long term goals.
TIP #8
Once you begin your real estate career, you'll wonder why you waited so long to begin. Do not allow yourself to become complacent!
Many investors fall in love with their real estate once they see how well it is doing. When cash flow has been going well each year, they fall in love with their tenants or at least get so friendly with them that they do not maintain rental standards that keep the price where the market will bear.
Or, they see how appreciation has worked its course and fail to watch for signs of falling prices because they want to sell only at the highest price (yes, they get greedy...)
Never fool yourself into thinking your property is doing too well to sell or trade up because your cash flow is considerably higher than when you purchased the property or that the appreciation swing will never end. It always does and you as a real estate investor have to pay attention to it.
TIP #9
Many real estate investors continually try to purchase investment properties that are not really on the market. What I mean by that is the property owners have the attitude of "Sure, my property is for sale... for a price". Unfortunately, 'for a price' usually means it will make no financial sense for an investor.
Be sure to analyze the real estate for its true value and work only with truly motivated sellers that are willing to work within parameters that allow you to make a profit for the time, money and effort you put into it.
TIP #10
Never fall into the trap of thinking that you will get rich quick in real estate. Getting rich overnight will not happen regardless of what some of the so called "experts" tell you. Real Estate takes some time, effort and knowledge to do it with minimum financial risk.
Remember that YOU can do it, too! You can join the millions of investors who create sizable incomes through real estate investing, you simply must understand that it is not an overnight process and stick with it!
Above all, do not be afraid of real estate investing. Thousands of every day people succeed admirably in this industry every year.
Gather the information you need, then get started making money!
