As a successful
real estate investor, you must avoid potential losses that could quickly put
you out of business. Avoiding such potential keeps you safe and successful in
your real estate investing business.
Follow these 6 tips
to stay safe and profitable as a real estate investor.
1) Buy properties
with equity
This is a simple,
golden rule. If there is no immediate equity, stay out it.
The real estate
market is unlikely to improve drastically in the foreseeable future, so do not
bank on future profits from increased value.
In the current real
estate market, too many properties are sitting with no buyers. Even banks are
offering properties at deep discounts, as much as 30%.
If you buy directly
from motivated sellers, focus on those properties that have immediate equity
even if you use creative means of financing such as lease options.
2) Know your area
Even with equity,
you must make sure you buy houses in the right neighborhood.
It also means that
if you decide to keep it, you might not get good tenants.
Focus on areas that
people like. Can you live there? Can you let your kids grow up there?
Does this area show
growth and improvement for future?
If you answered
yes, then this may be a good place to invest.
3) Is there demand
for rental properties?
If you buy houses
to hold, you probably need to rent them out. Can you easily rent out properties
in that area?
If you cannot sell
it right away, can you rent it out? In case of unforeseen circumstances, this
will cushion against possible losses.
4) Think outside
the box
Sometimes even with
little to no equity, you could still make money if you did lease options, rent
to own or owner financing.
If you get a
property with equity and sell it on terms, you can make a profit right from the
beginning.
Consult an attorney
regarding the real estate transactions you do.
5) Invest little
money
If things did not
work out as expected, how much money can you lose? The less money you put in,
the less you stand to lose if the deal does not work out.
This applies
whether you get a traditional bank loan or buy on terms.
6) Use private
money
A ready supply of
quick cash for your deals is a must for successful real estate investing. You
can buy any type of properties, even on terms.
For example, you
cannot acquire a lease option property using a bank loan, but can do so with
private money.
It is necessary to
have a good real estate investor website attracting private money investors for
this. This website will tell your story for you.
Once you have
private money investors, the sky is the limit.
About the Author
Simon Macharia
invests in real estate in Texas. Learn how to run your business from an
interactive real estate investor website and also have a private money website
from http://www.realestateinvestorswebsites.net.
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