5 Avoidable Mistakes That Swallow New Real Estate Investors
Every real estate investor was at one time a “newbie,” someone who is just stepping out into the world of real estate. Mistakes are made be each of them, some of them detrimental, some of them not so detrimental, and all of them lessons to learn in order to be successful in the real estate investing game. Here are the top 5 mistakes that newbie’s make:
1. Under-estimate the Market
Most newbie’s believe that they can get something for nothing, especially in this economy. They think that most seller’s will willingly give them the property for next to nothing. Does this happen? Do seller’s give properties away? Rarely. Sellers are selling because they want to: a.) sell, and b.) make money. A working knowledge of the value of a property is critical as opposed to the “what I want it for” value of the property. Knowing the market and how to point out flaws in an investment property can be the difference between picking up a great deal and killing a deal on the spot. Making a connection with a seller and coming to a common ground while still maintaining the profit in a deal is very important. Many newbie’s lose out on several properties before they learn this lesson.
2. Neglect to get finances in order.
A fatal fall for many newbie’s is that they do not get their finances in order before making an offer. This includes investors who are purchasing cash – the closing company wants to know where your cash came from, so it must be established in a bank account or a proof of funds letter from your personal banker. If this is something that you do not have lined up, there are several companies out there who offer POF letters that are relatively easy to obtain.
3. Under-estimate Cost of Repairs/Updates
A big pitfall for a newbie is that they do not have a comprehensive understanding of repair and updating costs, or worse, think they can do it themselves. The result? Loss of time to rent or sell the property and going over budget. The best way to fix this mistake is to acquire three quotes from different contractors. The newbie will learn more about repairs, updates and costs. When you’re getting started, no matter if you’re a wholesaler or a rehabber; it is always a good idea to make a connection with a trustworthy contractor in your area. Throw him a few bucks, buy him lunch, or even fill his gas tank up and he will gladly walk you through some of the tuff evaluations.
4. Driving out to look at every single property
New investors often want to drive out and look at every single property that they get a phone call about. This can be very expensive and time consuming. In a year, it is not uncommon for an investor to get leads on 100 – 200 great properties. If they were to drive out and look at every single one, then this would be a 60hr a week job. Don’t do that. Qualify your leads on the phone. Make sure the sellers are motivated, ask about repairs, and crunch the numbers before you decide to drive out. If there is no profit in the deal then why should you drive out to look at it? You shouldn’t!
5. Act too slowly in purchasing.
It is difficult for a newbie real estate investor to act quickly because they do not have the experience or knowledge yet to back themselves up. What often happens is they lose out on great investment properties because they do not “pull the trigger” to make the decision to buy. The loss of potential income is impossible to calculate from this mistake. How to avoid it? Become knowledgeable and confident so good decisions can be made in haste.
By: Dan koch
Tips to Help You Sell Your Home
Once we experienced the crash in our real estate market back in 2008, all markets across the country got hit hard. Prices dropped by 50% from their former heights, leaving some home prices spiraling totally out of control. It’s no surprise that home values have suffered everywhere across the United States.
While home prices have taken a plunge, there’s still a bit of good news to be seen coming around the corner. The values have stayed fairly level since the start of 2011, which means our market is getting stronger daily. It’s entirely possible things will keep moving toward the right direction. So remember that we still have a buyer’s market, and that means sellers have to work harder to show how much value they still have out there. To help sellers get their best price, we’ll cover a few tips to help out:
Study The Local Market – It’s extremely important to keep on top of your local housing market. Whenever you’re armed with a good feel for what real estate prices seem to be averaging for your area, then you will better know how much your home can bring you.
Curb Appeal – One good way of getting your price is to have lots of curb appeal. When buyers drive past your home, they’ll look it over closely, and you need to be ready for their scrutiny. Add some lighting here and there, do some landscaping, maybe paint a few spots, and you’ll be surprised what a difference it makes.
Paint Your Walls – This move is by no means mandatory, but oh what a difference it can make. The price of paint will seem very inexpensive against the extra cash you can get in your asking price once you’ve painted the walls.
Clean Your Home – You also should try to get that home as clean as possible. This helps with getting your asking price. If your house is cluttered and full of dirty spots, then buyers are going to be turned off. It doesn’t matter that they were once interested, it’s good odds they won’t meet your asking price. Make your home shine before you show it. Pay special attention to the bathroom and kitchen. This kind of work pays off well.
Hire A Home Inspector – This is a good tip as well. Be sure to hire yourself a home inspector. They’ll help to find any problems in need of repair before a buyer hires one. This approach enables you to ask for a price that’s higher and to sell the home faster.
If you take these tips to heart and do them, you’ll surely get more for your home than if you don’t. Anytime you improve on your home, in any way, it improves your home value, and your ability to get the best price.
Using A Website To Advertise Your Positive Cash Flow Property Deals
Advertising products and services online is certainly nothing new. It is now just part of life for individuals and companies alike – so why not think a little ‘outside of the box’ when it comes to advertising your positive cash flow property for Wrapping purposes and put up a website specifically designed to just that?
Things change rapidly online with new software and services popping up all the time but the basic steps of getting a website ‘online’ are pretty much the same as they have always been – and it’s an easy job even if you have no prior experience. Put it this way, with just a little bit of start-up money, a computer and a bit of help from your friends, you can have your website up in no time.
If you don’t know anyone who can show you the basics of getting your website up if you don’t already have the knowledge, I would suggest you look around some of the freelancing sites online on put an advertisement in your local college or library stating that you are looking for a bit of assistance. Of course, you can go the whole hog and spend thousands getting a fancy site put together but there would be no harm in waiting until you have money from your investments coming in before you go down that route?
Many people find that once they get started looking into building their own websites either by attending some classes or reading books, they actually enjoy tackling the job themselves!
Website Necessities
Even a basic website needs to have certain elements to it for it to work for you. You need to have a website address (otherwise known as a domain name or URL) that people find easy to spell and recall and ‘makes sense’ to what your business is about.
Once you have that, you need to put a fair bit of information (called content) on your site on a regular basis – this not only keeps your visitors coming back to see more about you and what properties you have on offer, it also keeps the search engine ‘spiders’ happily crawling your page and naturally ranking it high on searches.
Establishing a graphic identity (or logo) is pretty important too. This really helps for branding purposes and helps your visitors recognise you. As with any kind of selling whether it is a house or a garden shed, people buy on trust, like and know – the last thing they want is a rough deal when it comes to spending so much money – a strong, trusted and likeable reputation online where you are open and visible to the world for scrutiny is essential nowadays.
Making your site a go-to resource and sharing your expertise will do more for your selling strategy than anything else!
Of course, there is much greater detail that I could go into but hopefully this article has given you yet another helpful idea on how to advertise your positive cash flow Wrap properties.
Marketing on Craigslist For Buyers: Is It Worth It?
The key to flipping properties consistently month after month is having motivated cash buyers. There are tons of ways to market for cash buyers in your area. One way is by putting up ads on Craigslist every day. The success of using craigslist varies in different areas. You just have to weed out the real buyers from the tire kickers. Here in Florida craigslist is somewhat saturated with a lot of other wholesaler properties & ads.
But I still continue to post ads on Craigslist and get a great response rate. Now if your just relying on Craigslist to sell your properties, that’s not the smartest thing to do. It’s probably better to draw buyers in by putting up a advertisement that will attract them to your squeeze page. This way you can get there information, and then follow up with them later. Craigslist isn’t the most effective way to find cash buyers, but its still the number one classified site in the World. So in my opinion its definitely worth using.
You can even attract out of state buyers, as well as international. Which you wouldn’t be able to achieve by putting out a bandit sign per say. Actively with the ads that I post up on Craigslist each week. I’m retaining 8-15 new buyers to my squeeze pages. I recommend to start posting ads on Craigslist today. Something simple to attract cash buyers like 50% market value 3 bedroom properties that cash flow. Than put your website domain name in. This alone has grown my buyers list exponentially.
No Offers, No Money.
I remember when I first got into Real Estate. I remember my mentor saying “If your not making offers, your not making money.” He also said, “You should be making 5-10 offers a day.” I stopped for a minute and thought about it. I realized he was right. All this time I had been trying to educate myself, and would do a little marketing here and there. But in reality I wasn’t making any offers, or money.
From them on my business changed forever. Real Estate as you have probably heard is a numbers game. Your going to go through several leads before you get to that golden nugget. You will make tons of offers and none of them will get accepted but one. For you to be successful you have to take a lot of action, and start to make offers on properties. I know it can be frightening to offer a homeowner 50k when there asking for 90k. But you have to fight that fear, and get into the habit of talking with sellers. The more you do it, the less frightening it becomes.
So my question to you. How many offers are you making today?
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