A lot of real estate investor get turned off once they take a first glance at a certain property and see that it is a fixer-upper home and dare not take a second look. Let me tell you this straight up, DO NOT JUDGE A PROPERTY BY IT’S LOOKS! Real estate investment properties come in many different forms which are why you should not be turned off by the looks of a home but rather pay further attention to the details.
Let us put ourselves in a scenario wherein we are trying to decide whether or not to purchase a ‘fixer-upper’ home. Here are a few steps to follow:
- Examine how great the damages are and how far they are from repair
Although some fixer-upper homes are doing just fine and have only a few fixtures that need repair, other fixer-upper homes are in way too far from repair. Let’s be honest, sometimes we want to be that certain hero that turned nothing into something but sometimes this is not the case. Be careful when examining the damages and it is nice to rely on professional help when inspecting the said property.
- Compute the possible expenses in having the house repaired
Real estate investment properties are not the only things you should put into computation but also the additional cost of repair or if you would like to call, repackaging. Having a house repaired is like having the house brought back to life back again with a fresh start and repackaging that property would cost you a little extra. Once done with your computations, ask yourself “Is it worth it”? Having a potential value in mind, is it above your expenses good enough to make a decent or even great profit or is it just above the break even value and even in some cases worse, below.
- See the BIG picture
Do not focus on the BETTER picture but focus on the BIG picture. Some people like to stay positive all throughout and investing or business in general just does not operate based on positivity. Although it would be nice to reach maximum profit, you should prepare for the potential loss. Keep your hopes up high and your head down low. Even if you are hoping for the best, prepare for the worst and make sure you are not putting yourself on a burning bridge
A real estate investor is something that is made for everyone but only those who are willing to train themselves will succeed. Do not be afraid of a ‘fixer-upper’ home. Rather, be challenged! Most of the best profits that have been made from ‘fixer-upper’ homes. We at Nicholas Haley are in the search of ‘fixer-upper’ homes since we believe that every home deserves a second chance. Should you have a ‘fixer-upper’ home you would like to sell, feel free to contact us right away.
With a current property on hand. You as a real estate investor has the choice to either sell out that said property or to rent it out. Let us divide this process into three parts; knowing the value, knowing the market, knowing the potential rate. The best real estate investing is in decisions made in between of the option of either selling or renting your property out. These three parts are essential for you to be able to make a profit from your property by renting it out. Although some people think renting is not as effective as selling your property, believe me, or not, that is a very big mistake! Think of it this way. You own a commercial lot or building in a small town and thought to yourself that you do not get enough by renting it out and decide to sell it. A year later, a mall is then constructed right next to your commercial lot or building. What do you think would happen to the value of your commercial lot or building should you have opted not to sell that property?
Let us talk a bit more about the three parts mentioned earlier:
- Knowing the value
Knowing the value of your value should be a bit easy since you should already know the value before buying a certain value. Changes in a certain property’s value are bound to happen and all you have to do is update the current data on hand. Updating the current data which you have can be done easily and you can even ask a broker to do it for you.
- Knowing the market
Knowing the market means knowing the kind of people who want to rent your property and why. For example, your property might be near a certain school should it be residential or your property might be good for a drive-through restaurant should it be a commercial building. Knowing which clients are interested in your property and why they are interested is a very good way to be able to know the rates of which you should rent out your property. If the clients looking at renting your property are of higher-class and bigger spending capacity, find out why!
- Knowing the potential rate
Now that you know the market who is interested in renting your property, find out the potential rate of your property and do not forget to make a very detailed contract as your property might be worth a hundred dollars today then suddenly turn into a thousand dollars tomorrow! Find out what future projects are happening around you and make your contract in favor of yourself but do not be greedy. If the value of your property increases and the contract expires, do not hesitate to raise the terms but make sure you are not trying to squeeze out money out of your tenants.
As a real estate investor, renting out your property may be one of the best things that could happen to you. The best real estate investing decisions have been made by people with a very open minded perspective.
In the previous article, we were able to differentiate the homeowner from the real estate investor and also talk about finding a goldmine in places where other people do not see the potential. Now, let us talk more on how to invest property. Property can have three different actions: buy, sell, or rent. Since the other article talked about finding property, we will now talk about how to invest property because owning a property as a real estate investor is not much use unless you have already had a plan on what to do with it. We have tackled on the buying side of certain properties and now let us talk about the selling side of properties.
Selling property is very tricky because you have to have your data right. Having insufficient data and declaring your value a certain value without actually having a concrete reason why you are selling at a certain price is an unwise move to make.
Here are certain ways to be able to package and sell your property at a certain rate:
- Find the highest value before you bought the property
Finding the highest value before you bought the property is usually more effective than finding the lowest value. Telling your client that the certain property used to cost this much at a certain time usually lets them imagine the value you have given them as the floor instead of the ceiling. Get it? If the floor is high, then the ceiling must be higher! This is one way to be able to appreciate and package your property. For some people, giving a discount price works but for others and especially those who are into home owning, knowing that their property is of high value is something that helps them sleep well at night.
- Find the potential value based on surrounding property
Comparing the value or your property to the value of the property that surrounds it can be done both ways.
- Finding the property with the lowest value
Finding the property with the lowest value allows you to differentiate how far your property stands out making it look more and more expensive. Of course, do not compare your property to the obvious lowest-value looking property but compare your property to a property that is not obviously cheaper but actually is.
- Finding the property with the highest value
Comparing your property with the highest value is only effective if the gap is not that far. Promoting the potential and packaging the said property as something that is not too far from the highest value property in the neighborhood.
- Find a way to harmonize both together
Once you have all of these factors, find a way to package your property in a way that does not look too far out stating the potential and stating these few tricks can get you a really good deal of attention and may even help you sell your property right away!
When buying a property, keep in mind the reason why you are making that purchase. Either you are a homeowner or you are an investor. Let us differentiate the two. The homeowner is concerned about how liveable the property is. The homeowner is not the type of person that looks at the potential value of a property but looks at the current value. The current value of a property can be evaluated based on how well the property’s condition is in. The lighting works, the fixtures are perfect, the paint still looks good, and etc. These are a few things that go on in the mind of a homeowner which is why when presenting a certain property to a homeowner, they make sure that everything is in top condition. An investor, on the other hand, looks for the potential value of a property. Sure there are repairs to be made and a lot of installations to be dealt with but once a real estate investor sees a property, that person starts to imagine the potential value and starts planning on how to reach that value with the strict calculation of how much the real estate investor is going to spend. The best real estate investor can imagine the highest possible value a property can reach and automatically plans on how to get there.
Here are a few pointers on how to spot a gold mine:
Finding the worst looking house in the best looking community is usually a goldmine for the best real estate investor as he knows that since that property is the least attractive, that real estate investor can get that property for a really good deal and since the surroundings are promising, he has assurance that once he is able to repair and repackage the property, the value of that property can appreciate to a great value.
The conditions of the house are important. Some houses are damaged beyond repair and those properties although have potential might just end up causing you more expense on repairs rather than being able to appreciate in value.
- Direction of a property
Some people think that the direction of a property can be determined by imagination alone but there is actually a few things you can do to find the direction of a certain property.
Looking at the history of a certain property can tell you how the property appreciated or depreciated in value and will also give you ideas on what to do to appreciate the value of that property.
The current state of the property is a good measurement as to how far it is from the property’s previous value or how far it is from the potential value.
This is what we were talking about earlier. Comparing the past, present, and future allows you to take a peek on where you are on the property’s value and how much you can possibly make should the property appreciate.
The goal of every business should be to increase your money. To put it in easier words, money is a double game. The goal is to multiply your money again and again and again. As a real estate investor, investing is where most of our money comes from and as we all know, the real estate business is a slow but steadier business. The real estate business is a business that usually takes years to make a profit which is why our real estate training course wants to teach you how to be more time efficient to make sure that you reap your profits without any delay.
Here are a few tips for you to train yourself to become more time efficient
- Practice what you know
Some people do not want to practice and they end up going straight into contacting brokers or even clients right away. You may be overconfident in what you know and that could lead to your downfall. Although you already know a few things, you still have to practice your memory and make sure that you are good to go anytime. Whether it be a sales pitch or an inquiry, practice what you know again and again and again. The problem with some people is they think that they have practiced more than enough. This is never possible. There is no such thing as too much practice.
- Learn what you do not
Although you may be confident in what you know, it may still be insufficient and it always pays to be safe than sorry. Doing research always helps. Whether it be researching in competition, research in the market, or even research in property, this additional knowledge will always give you an upper hand. Although it is not a competition of who is more knowledgeable, it is still very necessary to know more than what you think is enough. Of course, you can not possibly know everything. Focus on the things you think you lack knowledge on. Knowing more saves you the time and effort of having to do your research during an ongoing negotiation.
- Be available
This is something that usually turns people off, delays. Do not, by all means, delay any form of discussion or agreement. Getting things done will always have a positive on both parties. Although some people think it is okay to delay for a day or two, this is not a good thing to do. Once both parties have agreed on a certain time, they are bound to their word. Chances are if you are late, they will not be able to keep their side of the bargain.
- Be punctual
Being on time is not enough. The best time to invest was yesterday, the second best time to invest is today. Always be one step ahead, this leaves you more time to plan and prepare therefore having higher success rates and in the long run, you will reap the benefits of your punctuality. After a few years, once you are ready to reap your profits, you will think back on how if you were late, those things would not be possible.
Real estate training courses are there to train you in skill and also help you achieve success as fast as possible because time is gold and it is the gold that keeps us going.