Death Of A Real Estate Investor
- Author Jeff Norber
- Published September 9, 2010
- Word count 540
How many deals does it take to make one a Real Estate Investor? Just one. But of course, that isn't going to make you rich! How many deals does it take to kill a Real Estate Investor? Just one. One mistake can wipe you out of this business. I've identified not one, but seven of the deadliest mistakes a real estate investor can make. Any one of these mistakes can seriously kill your success as a Real Estate Investor.
The first mistake is....
The "Gotta Get My First Deal Syndrome" It's that pressure gnawing at you to get that first deal! It makes you buy a property that doesn't meet your business goals and ends up sucking money from your pockets! You've got a good bit of information under your belt. Maybe you've gone to a seminar or two, watched some webinars or read some books. You feel you're ready. You're looking and looking for that home run deal but can't find it. You've got leads coming in that you're not sure what to do with so you pass them by.
Finally, after months of not doing a deal, your spouse and friends asking you how many houses you've bought, you pull the trigger on a nice single-family home! Whew - you've got one!
Now what? What's your exit strategy? Are you wholesaling it? Rehabbing? Holding and renting? Lease option? How are you going to cover the "monthly nut" - those expenses that are there every month? Will it cashflow if you decide to hold and rent? How much will repairs cost? How long will they take?
So many questions to answer....before you pull the trigger on a deal.
To avoid the "Gotta Get My First Deal Syndrome", you need to start with the end in mind. I know it's a cliché, but its true. You have to run the numbers to determine what your exit strategy will be. Figure out the After Repair Value (ARV), the repair costs (over estimate those numbers!!!) and then determine your Maximum Allowable Offer (MAO). This will give you the possible exit strategies.
If you're wholesaling, don't forget to include your investor's profit as well as your commission. You'll also need to keep your MAO no higher than 65% of the ARV.
If you're holding and renting, what are the local rental rates? How long will it take to find a tenant? What are the holding costs? Add these numbers to help determine in this is a possibility.
If you're planning on lease optioning the property you need to determine the minimum amount of backend profit that works for your business. Don't forget about the terms. While they're negotiable, you need them to work for your business.
The best way to avoid the deadly mistake of "Gotta Get My First Deal Syndrome", you need to start with the end in mind. Determine your exit strategy and your maximum allowable offer. This will tell you whether or not the deal is a good one! If it is, pull the trigger and follow your plan. If not, move on....there's plenty more deals out there!
There are six more deadly mistakes I've identified, but those are for a different day!
Stay tuned and happy investing!
Jeff
I've identified the 7 Biggest Mistakes most real estate investors make and there are still six others - check them out at http://www.michiganhomestobuy.com.
www.311properties.com - Detroit Michigan Real Estate Solutions! Your Turnkey Solution to real estate problems! From the start of a transaction all the way through to the end - I help buyers, sellers and investors and private money lenders!
Article source: https://articlebiz.comRate article
Article comments
There are no posted comments.
Related articles
- Comparing Removals services-in-wandsworth: Your Ultimate Guide
- Port Orange -- The Perfect Twin Sister to Daytona Beach
- RE/MAX Ace Spearheads Innovative Housing Solutions in the GTA
- Should You Waive the Home Inspection Contingency? Weighing the Risks and Benefits
- Avenir: Embracing Lifestyle and Community in Palm Beach Gardens
- Serbian Real Estate: A Tidbit for Investors
- Discovering Life in Pattaya, Thailand: An In-Depth Handbook for Expatriates
- DEBUNKING HOME REPORT MYTHS
- Don't Let a Financial Hardship Force You to List Your House
- Safe Water Starts at Home
- Don’t let Missing Insulation Lead to High Energy Bills
- Property Investors Amidst Favorable Swedish Krona Rates
- How Real Estate Professionals in Houston Go Above and Beyond for Home Sellers
- Reasons to invest in real estate in Cyprus
- Top 10 criteria to select an Insurance Claim Appraiser
- Comprehensive Home Inspection Checklist for Buyer, Seller, and Homeowner
- DEBUNKING HOME REPORT MYTHS
- North Carolina Real Estate Market: Shifting Market Dynamics on the way?
- Selling Your House in Winter: Effective Tips and Strategies for Success
- Would you like to have a Free House?
- 5 Ways To Know You're Ready To Buy A Home
- "Unlocking the Potential: Investing in Dubai's Booming Real Estate Market"
- Home Decorating Tips To Make Your Home Sell FAST!
- How Home Loans Became Helpful?
- Buying A Distressed Property
- How To Identify Utah's Top 50 Real Estate Agents On Social Media
- Are You Looking To Move To Logan, Utah?
- Tips to sell your home in 2023
- Dubai Real Estate Market: An Overview
- https://www.eastpascoliving.com/active-adult-communities-in-east-pasco-florida