4 Steps To Real Estate Investing Success
Real estate investing is always good and sometimes it’s red hot. When it’s hot dozens of real estate seminars begin rolling across the country and thousands of people spend thousands of dollars for investing education.
Real estate investing is always profitable, and it may be extremely profitable at times. When the weather gets hot, dozens of real estate seminars pop up all over the country, with thousands of people spending thousands of dollars on investment courses.
It’s shocking to find that only approximately 5% of the thousands of people who attend these seminars buy even one investment property. Why? The real estate experts peddle the “sizzle” and make real estate earnings seem simple. The truth is that it is straightforward, but not simple.
Here’s a quick plan that will enable anyone to begin building financial independence.
There are basically four steps to investing in single family homes:
1. Purchase homes at a discount to their full market worth. Yes, people do sell their properties for less than their full market value. The trick is to realise that most sellers would only entertain a purchase offer that is all cash and within 5% to 10% of their asking price.
The savvy investor understands how to locate financially troubled homeowners who have no alternative but to sell for less than market value. They’ve lost their job or been transferred unexpectedly; they’re divorcing; they’ve been living beyond their means; the family has been buried in medical expenses; and, more often than not these days, their money has gone to fund a drug habit.
Motivated sellers are people who are willing to sell anything for a good price.
2. How do you locate sellers who are eager to sell? You put forth the effort! It is necessary to establish a little marketing plan, just like it is for any other firm. One that is basic but very powerful is door to door sales, which was proven 75 years ago by the Fuller Brush company.
You’re pitching your home-buying expertise to those who need to sell. You are available when they require assistance, and you have the ability to assist them in solving at least a portion of their problem. You will learn more and buy more homes faster with door to door prospecting than with any other strategy. Most people, on the other hand, will not walk door to door for three or four hours per week. There are other options, of course.
You should keep an eye out for public notices announcing foreclosure sales. Meeting with a homeowner soon after they’ve received notice that they’re about to lose their house gives you the opportunity to work with a highly motivated seller. Probate, divorce, and bankruptcy are examples of public notices that present buying opportunities. Homes For Sale listings might be found in your local newspaper or on the internet.
You can contact the people listed in these announcements by phone or, if you want to save time, send a postcard expressing your interest in purchasing their home. It will generate sales possibilities, but not as many as face-to-face contact.
3. Once you’ve located a motivated seller, you’ll need to know how to structure offers that suit both you and the homeowner. A savvy real estate investor rapidly realises that he or she is in the business of fixing problems for the benefit of the seller, not stealing property.
The home owner is in some type of bind, and you can save them from public humiliation and, in most circumstances, provide them with some cash to help them get back on their feet.
No investor can afford to leave money on the table in every transaction. No one but Bill Gates has that kind of cash on hand. You’ll need to use unconventional methods such as leasing, options, and taking over mortgage payments. For certain transactions, little or no currency is required. In book stores or on EBay, you can get plenty of reasonably priced instructive material on those topics. Seminars sell the same education for thousands of dollars.
4. When you buy, you make a profit! Never buy a purchase unless you’ve thoroughly calculated how you’ll make a profit. Will the monthly rental income more than cover the monthly mortgage payment if you keep it as a long-term investment? Will you make a quick buck by selling the deal to another investor? Will you do minor repairs and resell the house for its full value? Will you immediately trade it in for something more desirable? Before you go out and buy something, make a strategy.
There you have it: four stages that can be completed in three to four hours per week by even a part-time investor. What’s the one thing that’s missing? Your tenacity and perseverance are admirable. If you stick to the plan for a few months, you will be successful.