Real Estate Investing Advice
By David Peter
- Find an old RE guy/gal in your town (one that's been doing RE deals for 20+ years -- and hopefully in 1980 when prime rates were 16-18% ) and tell them you want to learn the business. You need to follow them around for a few days (or weeks) to learn some of what they know. Be generous -- buy them lunch, help them with their work, and ASK LOTS OF QUESTIONS!!! They'll likely be impressed that you want to learn from them and you'll avoid SO MANY mistakes that younger investors don't even know about.
- Don't be shy -- you have to ask questions (lots of questions) and talk to lots of people to win in this business. You also have to make offers (lots of offers) that others think are insultingly low -- I never pay market price and I've always come out OK.
- Qualify your Tenant Buyer to purchase on L/O.
- Do complete research, title search and due diligence on any purchase. If you can't do that your self, hire a professional.
- Don't buy property with potential environmental problems. That means no gas stations, no auto repair garages, no auto paint shops, no dry cleaners, no meth labs, no company that deals with toxic and dangerous chemicals. If you consider such a property have professional help and do phase I and II environmental studies done BEFORE you purchase.
- Know it ain't all roses like the gurus tell it.
- Don't let anybody dictate you what your career should be. Work what you love to work (with the only condition if your financial situation allows you). If you want to be a full time real estate investor so be it. One deal alone will make you a year’s salary.
Keys to success in blue collar rentals:
1) Rule 1 - Buy low; make your money when you buy.
2) Make your place nicer than the competition and rent for slightly below market, allowing you your pick of applicants (almost everyone that looks at my houses fills out an application).
3) Screen tenants well, and before moving them in, find out if they have taken care of their previous home - yes that means you have to "drop by".
4) I don't worry much about credit if everything else looks good, but I do want to know they pay their rent, and I don't give out a key without certified funds.
5) Consider lease/options as a way to increase cash flow, reduce repairs, and get tenants that think like owners.
Note: You can start with blue collar if your budget does not allow you to invest in the more expensive areas. In addition, blue collar areas cash flow better. Courtesy of http://www.buying-investment-property.info/.
There is a lot you can learn from people even when they are negative, but you have to learn how to filter out the bad stuff. In my opinion you will never get successful if you think you have it all figured out. Even the richest people rely on others opinion. Just make sure you always have the final say.
By David Peter
Copyright © 2006 This article may not be reprinted, linked to, or otherwise redistributed (in its entirety or in part, via the Internet or any other means), without first obtaining the prior written consent of the author.