I have been fortunate enough in my life
to have done a hand full of successful fix-and-flip real estate
investments. As a matter of fact, I am in the beginning stages of a
fix-and-flip project right now, with a house in Madison, AL. Here are
three tips that I use to find great properties that can turn a
profit.
Always Be On The Lookout
Always watching the market is
important, but not for the reason you might think. Many believe that
you have to be quick, or the good deals will get snatched up by
someone else, thus you need to always watch and be the first to jump
on the good ones. This has not been my experience, in fact, some of
the best fix-and-flips I have done were properties that had sat on
the market for the better park of a year, before I took an interest
in them and ultimately bought them.
The reason I like to be on the constant
lookout (even when I am not in a position to buy) is because it helps
me get a feel for the local market. It puts whatever I am considering
as an investment into perspective, because I know roughly what I
could buy for the same price in that same.
Don't pay too much / Don't get attached
The key to not paying too much when
negotiated a price is this: Don't get attached. Don't get tunnel
vision and trick yourself into thinking, 'this is the one and only
best deal of all time'. Great deals on real estate come and go. There
will always be another one, so make an offer, stand your ground, and
don't be afraid to walk away. If you use this technique consistently,
you will find yourself able to buy property for less than you've
imagined, and you will know you got a great price.
Make a plan
If you fail to plan, you plan to fail.
Before you can think seriously about making an offer on an investment
property, you need to have a start to finish plan. This plan should
include financing, repair costs, taxes, fees, time frames, etc, and
should account for as many unforeseen circumstances as you can
imagine. You also want a well thought out exit strategy, which is how
you plan to get your money out of the investment. I personally don't
like to buy any property that I am not willing to live in, for the
rest of my life, if things go south.
Closing Thought
So those are my 3 tips for this post. I
hope it helps. Just remember, buying real estate is usually the
biggest type of purchases you will make, so unless you have cash to
burn, don't make it a casual discussion. The money you will save by
taking your time, doing good research, and using your head is
something most people can't afford to lose.
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