Thursday, April 18, 2013

Fix and Flip – 3 Tips on How to Buy Right


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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