Finding and Evaluating Property for Real Estate Investing
Today, investing in real estate can be easier and more profitable than ever. But whether in a healthy market or a down one, and with new tools to find and evaluate potentially profitable properties, you can still lose a lot of money in a short time.
To maximize the odds of winning, consider these tips...
The process of finding those 'diamonds in the rough' of real estate investing has been revolutionized by the Internet.
You can spend hours online finding, evaluating, and comparing descriptions, prices, photos, and useful legal info about properties close by your neck of the woods, or thousands of miles away. Unless you restrict yourself to FSBO (For Sale By Owner) ads on eBay, Google Base, or Windows Classifieds, though, prepare to pay sometimes hefty realtor fees.
Visit Realtor or estate agent businesses.
If you can afford it, obtain an MLS, a multiple listing service, and get the same information they get. In some locations, a license is required, even if you have the cash to play.
Even if you use the web to find a great value, be prepared to do some 'leg work'.
The only way to judge property properly is to do due diligence. You have to visit the property and the surrounding area. Is the neighborhood maintained in a way that won't depress the selling price? While you're driving around, look for FSBO signs, For Rent signs, and talk to some of the neighbors. After all, the next door neighbor might know something about that impressive yard...like it turns into a swamp after a few days of rain!
Be prepared to make more than one visit, in different kinds of weather and at different times of day, if possible. Property, land and houses, look and act different in the cool of the night than they do in the heat of the day.
And the best way to check for a leaky roof is to go when it's raining - exactly the weather you don't enjoy evaluating property in...right?
Well, neither will your competitor for that property. Going that one extra step could be what puts you ahead in the race.
Information is power.
After the informal inspection, you can strike some sort of contingent deal.
'Contingent', here, usually means the deal is dependent on a satisfactory professional inspection. Find an inspector who is experienced and reliable, even if you have to pay a little more. The price will be repaid many times over, especially if you use them regularly in the future.
Learn the craft yourself if you have time and interest, but at minimum learn at least enough to keep the inspector honest. Most are, anyway.
Review the report carefully. It's not required that everything is 100%, but every major and minor flaw should be recorded. Leaky plumbing or roofs, stained carpets, damaged walls or floors, inoperative air conditioning or heating systems, etc. Look especially for any standing water in basements, near foundations, etc.
Everything is negotiable, so there's no rule about who pays for repairs, if anybody. But information is power. Still, be realistic. Very few properties, even newly constructed ones, are perfect. If they are they're expensive enough to eliminate your profit, unless you plan to keep the investment for an extended period.
If you are really serious about real estate investing, educate yourself. One place to get started is at your local library. There are also many publications and services available online, but, before you shell out a ton of money, pick up a copy of "Investment Property Success", and study it carefully. You can download a free chapter to get a feel for the book, and, if you like what you see, you can order your own copy for immediate download for less than $30.
Now, I am going to be a smart-aleck.
If $30 is too much for you to pay for a quick, in-depth look at the world of real estate investing, then you do not have enough money, or moxie, to get into the field. If you just want to jump in feet-first without at least studying some equivalent training materials, you will kiss a lot more than $30 good-bye! If you spend the $30 and realize that real estate investing is not for you, you just saved yourself thousands of dollars.
To maximize the odds of winning, consider these tips...
The process of finding those 'diamonds in the rough' of real estate investing has been revolutionized by the Internet.
You can spend hours online finding, evaluating, and comparing descriptions, prices, photos, and useful legal info about properties close by your neck of the woods, or thousands of miles away. Unless you restrict yourself to FSBO (For Sale By Owner) ads on eBay, Google Base, or Windows Classifieds, though, prepare to pay sometimes hefty realtor fees.
Visit Realtor or estate agent businesses.
If you can afford it, obtain an MLS, a multiple listing service, and get the same information they get. In some locations, a license is required, even if you have the cash to play.
Even if you use the web to find a great value, be prepared to do some 'leg work'.
The only way to judge property properly is to do due diligence. You have to visit the property and the surrounding area. Is the neighborhood maintained in a way that won't depress the selling price? While you're driving around, look for FSBO signs, For Rent signs, and talk to some of the neighbors. After all, the next door neighbor might know something about that impressive yard...like it turns into a swamp after a few days of rain!
Be prepared to make more than one visit, in different kinds of weather and at different times of day, if possible. Property, land and houses, look and act different in the cool of the night than they do in the heat of the day.
And the best way to check for a leaky roof is to go when it's raining - exactly the weather you don't enjoy evaluating property in...right?
Well, neither will your competitor for that property. Going that one extra step could be what puts you ahead in the race.
Information is power.
After the informal inspection, you can strike some sort of contingent deal.
'Contingent', here, usually means the deal is dependent on a satisfactory professional inspection. Find an inspector who is experienced and reliable, even if you have to pay a little more. The price will be repaid many times over, especially if you use them regularly in the future.
Learn the craft yourself if you have time and interest, but at minimum learn at least enough to keep the inspector honest. Most are, anyway.
Review the report carefully. It's not required that everything is 100%, but every major and minor flaw should be recorded. Leaky plumbing or roofs, stained carpets, damaged walls or floors, inoperative air conditioning or heating systems, etc. Look especially for any standing water in basements, near foundations, etc.
Everything is negotiable, so there's no rule about who pays for repairs, if anybody. But information is power. Still, be realistic. Very few properties, even newly constructed ones, are perfect. If they are they're expensive enough to eliminate your profit, unless you plan to keep the investment for an extended period.
If you are really serious about real estate investing, educate yourself. One place to get started is at your local library. There are also many publications and services available online, but, before you shell out a ton of money, pick up a copy of "Investment Property Success", and study it carefully. You can download a free chapter to get a feel for the book, and, if you like what you see, you can order your own copy for immediate download for less than $30.
Now, I am going to be a smart-aleck.
If $30 is too much for you to pay for a quick, in-depth look at the world of real estate investing, then you do not have enough money, or moxie, to get into the field. If you just want to jump in feet-first without at least studying some equivalent training materials, you will kiss a lot more than $30 good-bye! If you spend the $30 and realize that real estate investing is not for you, you just saved yourself thousands of dollars.
Labels: finding and evaluating property for investment, real estate investing, real estate investing training
posted by Donovan Baldwin at 3:29 PM
1 Comments:
It's better if we're buying for a property to give a visit together with experts in determining whether it's a good buy and if it's really in good condition to make sure that you got the nicest deal on town.
dexxus,
"Investing can be more challenging for new real estate investors. fr. <real estate in Washington community"
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