Ten Real Estate Investing Tips

Ten Real Estate Investing Tips

Ten Real Estate Investing Tips
Real estate investing tips tend to​ be a​ bit vague, like invest in​ the​ right location, or​ make sure the​ numbers work .​
Actually, tips like these are important principles to​ remember .​
However, since they have been well represented in​ other articles, I​ want to​ share a​ few more specific tips with you.
1 .​
Listen to​ the​ market .​
The cabinet guy looked to​ me for​ a​ decision .​
I​ realized that I​ knew nothing at​ all about which cabinets people like, so I​ asked him which ones others were choosing, and​ he pointed to​ one that three quarters of​ his last forty customers had chosen .​
That's the​ one I​ want, I​ told him .​
Why argue with the​ market you are trying to​ sell to?
2 .​
Do your own research .​
The real estate agent might show you only the​ comparable sales that make the​ property look more valuable .​
Do your own research .​
Some counties have made it​ easy now, with sales prices online .​
You can also search any number of​ sites with MLS listings, just to​ get an​ idea about the​ asking prices of​ other nearby properties.
3 .​
Partner carefully .​
When you do a​ deal with partners, be the​ money or​ the​ management, but not both .​
Group decisions tend not to​ work well in​ real estate, and​ will cause you much stress .​
Once you decide on and​ agree to​ a​ plan, step back if​ you are investing the​ capital, and​ let your partner do his thing .​
Of course, step up and​ take control if​ you are managing the​ project.
4 .​
Negotiate openly .​
Just ask a​ seller outright, What do you want to​ get out of​ this? It is​ rare that someone is​ offended by this simple question, and​ it​ saves you from wasting valuable time talking about things that don't interest him or​ her .​
Once you get a​ clear answer, you can decide if​ you can give them what they want, and​ still get what you need.
5 .​
Invest safely .​
Investing isn't gambling .​
There is​ always risk, but the​ difference is​ that the​ odds are in​ your favor .​
If not, you are gambling .​
This why you shouldn't invest based on continued price increases .​
There is​ no guarantee that prices will continue up at​ any particular rate .​
Do deals that work even if​ prices go nowhere, and​ if​ values go up, you're that much better off.
6 .​
Run the​ numbers .​
It is​ about the​ numbers, and​ if​ it​ is​ income property, it's about one number in​ particular: cash flow .​
Whatever the​ local formulas are, whether gross rent multipliers or​ capitalization rates or​ whatever, just be sure that after every last expense you'll have cash flow from the​ very first month.
Rules, formulas and​ real estate tips are really just guidelines .​
Even the​ rule above about cash flow can be broken if​ you know that rents can be raised soon, for​ example .​
You have to​ use common sense and​ learn from experience, and​ you can't replace good analysis with rules, formulas and​ real estate tips.

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