As a real estate investor, you should always be on the lookout for real estate investing opportunities. Every once in awhile, these opportunities might come your way easily, but for the most part, you must look for them.
There is much more to real estate investing opportunities than a low purchase price. Too many times have investors made this assumption only to find the hard way that an easy purchase is not always an easy sale. Knowing some tips to recognize real estate investing opportunities will help make your investing much easier.
Property worth is one of the first ways of recognizing real estate investing opportunities. You don’t have to hire an appraiser or a realtor to assist you in figuring out the worth of a real estate property. You can use some of the same techniques these professional use to determine property worth. Look up the price of similar properties that have recently sold. Between three and five properties will give you a good idea of the property worth.
Once you have determined the property worth, the next indicator of real estate investing opportunities is the amount of repairs the property needs. It doesn’t matter if you can purchase a property for a penny. If it costs need $50,000 in repairs and similar properties in good condition have sold for $40,000, then it should not be deemed as one of your real estate investing opportunities.
You can find out the repairs that are needed in one of two ways. The first way is to ask the seller what repairs are needed. Some sellers will be completely honest, some will not. The second way is to use a bonded contractor. You can get referrals for contractors from other investors or respected realtors.
The amount you can purchase a property for is perhaps the second most important factor in recognizing real estate investing opportunities. The lower you can purchase the property for, the better an opportunity it is. In general, the best real estate investing opportunities are those which you can purchase a home for 20% or more below market value. If you can negotiate even lower, that’s better.
You might make a few mistakes in the beginning, but these mistakes bring knowledge that will only make you better at picking out real estate investing opportunities.
At this point you can use an appraiser to tell you the value of the property. Any repairs should be made before the appraiser reviews the home. The object is to have the appraisals as high as possible to help you set your selling price. The selling price, relative to the purchase price, is the most important factor you can use to recognize real estate investing opportunities. The higher you can sell the property for, the better an opportunity it is.
There is a fair amount of work required in recognizing real estate investing opportunities. The first time you go through the process, it might be difficult and take what seems like a long time. As you get more experience you will learn to recognize an opportunity much easily and in a shorter amount of time. This, of course, will come with experience.
One of the biggest mistake you don’t want to make is not having the cash at hand when you do find the next great real estate opportunity to invest in. When you find real estate investment opportunities, every real estate business needs to have private money lenders (PML’s) in order to be profitable. However, most real estate investors have questions that hinder their success with private money.
The book, “Attracting Private Money Lenders: And 17 Vital Keys To Creating Wealth While Building A Profitable Real Estate Investment Business” discusses all the topics applicable to your real estate investment business and ties it all together by showing you how understanding each topic can help you attract more private money lenders and grow your business.