It’s a buyers market, to be sure. How do you make your property attractive? How do you get around pesky zoning problems and inspection issues? In short, what do you do if you’re a real estate investor looking to turn a profit? Listed below are ten ideas that should help you get on your way.
1 Go large
One house isn’t going to make you rich. Try buying a block of properties, either commercial or residential. The more you purchase, the more you can turn. Also, it becomes easier to collect properties from the government if you offer to buy in bluk.
2 Don’t go it alone
It never hurts to have other investors to help saddle the burdon. You’ll find pretty quickly that your costs are not what you thought they would be, and other people might have more time and experience (not to mention investment capital) to put towards your project.
3 Talk to the government
Local and state governments are often times sitting on blocks of homes that are foreclosed on or just vacant. Many times these are properties they will not only be willing to sell you for next to nothing, but they might even help you get the money for the properties. Their angle? If you fix them up and sell them, people who pay property taxes will live there, thereby helping to offset the cost of the homes.
4 Look to the community
Many community agencies, churches and centers will know of or be sitting on viable housing opportunities. Don’t pass these by! Many will already have information lined up on grants and housing contacts, all you need to do is show a serious interest and be willing to work to a common end of having a property that people want to live in when you’re done.
5 Realize you don’t know everything
You’re probably not an expert carpenter, plumber, electrician or other necessary repairman that can magically make your investment work. Realize pretty early on that you will need help, and that outside contractors will need to be called in. Remember, you can do it yourself and waste time, or you can do it right and turn that property.
6 Don’t dawdle
The longer you sit on a property, the longer it becomes a black hole for your cash. Don’t commit to purchasing properties if you’re only going to put Sunday afternoons into it; be ready to dive in and get to work. The sooner it’s ready, the sooner it can sell.
7 Don’t shoot for the moon
You will not make a million on your first sell, so don’t act like it. Remember, the name of the game is long-term accrual, not get rich quick. You and your investors might see a return of $10,000 profit on a sale if you’re extremely lucky. This is why bulk buying is key.
8 Collect them all
Don’t look for one property; look for a dozen that are in close proximity. Buying a neighborhood is easier than buying one because the combined low value of the homes will help to drive them collectively down. Therefore, if you buy multiple homes and fix them all up, this will collectively raise the property value of the neighborhood, making it more desirable to a higher-paying clientele.
9 Go to council meetings
Get to know the City Council, and don’t act like a jerk when they tell you no. Present your zoning case and make sure you’ve consulted a lawyer before potentially wasting everyone’s time. Most council’s will be open to rezoning within reason (don’t expect a residential to magically go to M1 just because you said please), but it still may take some persuasion. Be calm, and also don’t be afraid to broach the subject before you buy. Sometimes they will bend just to see the property increase in value.
10 Don’t be bossed around
If you are trying to turn a property that you have rented out and have a problem tenant, remember that the tenant is not a permanent fixture. A contract is a contract, and if they are resistant to any repairs or changes you make, remind them that you, not they, are the one that owns the property. Also, don’t be afraid to step up the ante. If they won’t play nice, let them know immediately where you stand with small claims court. Most people won’t take the time or money to push any issue past that basic threat.
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