Ensuring your Success when Purchasing Rehab Properties
- Author Charles & Kim Petty
- Published May 2, 2010
- Word count 2,015
You have heard all of the hype surrounding real estate investing, and you’re ready to get started. You know that there is money to be made – you’ve seen the late night infomercials, and you even know some people who are investing in real estate successfully.
So, you ask yourself the following questions:
"How do I get started in real estate investing?"
"What kind of property should I buy?"
"I don’t know anything about working with contractors, should I do this?"
"How do I know that won’t get in over my head?"
We are going to discuss those questions, and give you some good, solid answers that will allow you to get started investing in real estate – on the right track.
The best way to get started investing in real estate is to educate yourself. This does not mean taking a course to become a licensed real estate agent, or reading countless books. You can educate yourself by taking advantage of the numerous resources that are available to you.
In most major cities, you will be able to find a Real Estate Investors Association (REIA). This is a group of people who are either investing in real estate or thinking about doing it. Almost all REIA’s have monthly meetings where you can network with other real estate investors, meet service providers, listen to speakers with expertise in varying areas, and even find properties to invest in.
Locating a REIA is a great way to get started. In the metro Atlanta area, there are two such organizations. One is the Georgia Real Estate Investors Association. They hold monthly meetings the 2nd Monday of the month. They also offer subgroups, to allow you to meet in a small group setting with experts in various areas. You can even stop by their office and take advantage of their many resources, including software, computers and more. Membership is required.
There is also a smaller, more intimate group in the metro Atlanta area. This group is simply called Real Estate Investors Association. They meet the 2nd Thursday of the month. Their meetings always have a speaker and there are service providers there for you to speak with as well. There is no membership cost, but there is an admission charge.
Another way to educate yourself is to attend a seminar. You need not spend a lot of money doing this. There are a few companies in the metro Atlanta area that offer seminars to help you get started in real estate investing. Some of these are free, while others charge a fee. The key here is to make sure that you get good, solid information that you can use. These seminars provide an excellent opportunity for you to meet key players in the investing business. You can ask questions in a smaller, intimate atmosphere. Again, you have the opportunity to network with other investors. Take advantage of it!
As you can see, there are many ways to get started. You are doing one of them right now! By reading Investor 2 Investor and publications like it, you are exposing yourself to an abundance of quality information. That is an excellent step.
The most important thing is to actually get started. Don’t educate yourself to the point of not doing anything. There is always more to learn each day. That will never change. But, in order to succeed, you have to start. And there is no better time than today!
Destiny is not a matter of chance; it is a matter of choice. – Unknown
Your Investment Strategy
There are several types of property that you can invest in. There is commercial real estate – such as office buildings, apartment buildings, etc. and there residential real estate. Residential real estate can be either multi-family or single-family.
In today’s market, single family homes are your best investment vehicle. I say this because; it is the American Dream to own a home. Most people, who are for looking for a home, want their own house, not one that is attached to another.
Noted Real Estate Investor, John Adams* lists the following 9 reasons for investing in single family homes:
Bargains are readily available in single family homes.
Financing is easy to get for single family homes.
Single family homes are readily available in most communities.
Single family homes are easier to rent.
Single family homes are easier to sell.
The single family home market is extremely stable.
Single family homes are relatively easy to understand.
Single family homes offer excellent tax benefits.
Single family homes make great retirement plans.
Let’s take a minute and review these points in greater detail. First, it is true that you can get great deals on single family homes. Since most people who live in single family homes also own them, this means that, at any given time, there are a number of them available for purchase. People go through lots of life changes that require them to sell their home. They may be increasing the size of their family, moving into a smaller home because their children have moved out or they may have been downsized or have experienced any other circumstances which require them to sell their home. Lots of these people need to sell quickly and are able to be flexible on their asking price – and that means a bargain for you!
Financing is extremely easy to get for single family homes. In fact, there are a group of lenders who specialize in lending to investors who purchase and fix up single family homes. In most cases you can borrow the funds to purchase the property and complete the renovations. We will go into how this works in greater detail further along in the series.
Think about how many single family homes you see every day. They are everywhere. And because they are so readily available, they are very easy to rent and sell. Many people want to move up from an apartment and decide to rent a house. There are others who have gone through adverse conditions and although they may no longer own a house, they still want to live in one. They are very happy to rent. And for as many people looking to rent a house, you have people looking to buy them as well.
The single family home market is very stable, for all of these reasons. They are easy to manage. There are only so many things to take care of in a house, and with a good property management company, that task is made even easier.
There are great tax benefits that come from investing in single family homes. This is not the forum to go into all of them, but make sure you speak to a good accountant who can help you reap this additional benefit of your real estate investing.
Finally, it takes more than one house to build your empire, but with as few as ten of them, you can retire and live comfortably. You have many options available to you. You have your monthly rental income (less any property management costs), you can do a refinance and get tax-free cash based on the equity in the house, and lastly, you can sell whenever you would like.
The secret of success in life is for a man to be ready for his opportunity when it comes. – Benjamin Disraeli
Building your team
In order to make your real estate investing more successful and enjoyable, you need to surround yourself with a team of professionals who know the business and have your best interests at heart.
There are several ways to build this team. You can network at meetings, seminars and other events and collect business cards. You can speak with individuals to get a feel for them. Let them know what you are trying to do, and see if they can help you achieve your goals.
You can also look in the yellow pages and the newspaper for additional contacts. Just a note – Yellow Page advertisers may have higher prices than you would like to pay, simply because their advertising costs are built into their pricing.
It is a good idea to speak with people whom you know that are already investing, or simply know people who do the job that you are looking for. It is important to get references, and when you are getting quotes for work to be done, get two or three.
You can also hook up with a company that pulls everything together for you. This type of system is often called "TurnKey" or "Automatic." This simply means that everything has been set up with you, and the service providers have been tried, tested and proven to be true. Many investors prefer this type of system, because it takes the guesswork out of their real estate investing. Here are some of the resources that you can expect to find in a TurnKey System:
Investment Properties – these are typically single family homes, but can be any type of real estate that meets your investing criteria. They should be offered at a fair price, with plenty of equity for you.
Lenders – this includes purchase money lenders (often called hard money lenders) and mortgage/refinance specialists. Ideally, these individuals are accustomed to working with real estate investors and will have programs that are tailored to your unique needs. You will often find that serious service providers in this arena often specialize in working with investors.
Appraisers – a good appraiser is one of your best friends in this business. A good appraiser will be familiar with the market conditions and prices and ensure that the house is appraised with a realistic value. In the majority of cases, the appraiser must be approved by the lender. This should make you feel good because it means that the lender is comfortable with the appraisers work and is willing to lend based on it.
Contractors – there are a wide range of contractors out there. It is important to get a good, reliable contractor on your team. This will allow you to control your costs and your time. When you know that a job will be completed at a reasonable cost within a reasonable time period, you will be able to breathe a lot easier. Contractors who are recommended through a TurnKey System have been through a screening process. While there are no guarantees, this should make you feel better to know that their pricing, quality and timeliness are typically in-line, or they would not be recommended to you.
Property Management – a good property management can change your outlook on owning rental property. Many people are hesitant to get started investing, because they have heard horror stories from other investors about leaky toilets, midnight phone calls and more. Well, with a good property management company you do not have to worry about that. They will run your ads, interview your prospective tenants, collect the rent, handle maintenance and even send in your mortgage payment, if you would like. This will either be done for a flat fee based on the number of properties that you own, or a percentage of the monthly rent that you receive from the tenant.
Those are the major players that you will need on your team. Surround yourself with good, honest reliable people and you will have a successful real estate investing career.
Don’t be afraid to make mistakes. Mistakes are how we grow and learn. The important thing is to learn from your mistakes, so that you do not repeat them. More importantly, if you can, learn from the mistakes of others. Hook yourself up with someone who is honest, fair and knows what they are doing.
Congratulations on getting started! Your life is about to go in directions that you have only imagined. Don’t wait another day. The life that you keep dreaming about is really there for you! It is within your reach. Make it a reality by investing in rehab properties.
We wish you much success!
Virtual Real Estate Investing Experts Kim and Charles Petty have been
involved in over 700 real estate transactions in the last 9 years and
are the creators of the Ultimate Turn Key Virtual Real Estate
Investing Systems for investors all around the world who want to take
advantage of the awesome profit opportunities in today’s real estate
market. They are the worlds leading experts on Virtual Real Estate
Investing. Investors go to www.VirtualRealEstateInvestingProfits.comArticle source: http://articlebiz.com
There are no posted comments.
- Important Steps to Building a Home
- Retractable Pool Enclosures To Use in All Four Seasons
- Donating Real Estate Can Be Easy!
- How to Donate with Giving Center
- WHY YOU SHOULD RENT A LUXURY APARTMENT IN NYC RIGHT NOW
- Guelph home sales drop 70% as the real estate machine comes to a grinding halt
- 5 Steps on How to Declutter Your House for Sale
- The Best Real Estate Agent In Mississauga
- When to pour your polished concrete
- COVID-19 and Guelph’s real estate market. Where do buyers and sellers stand?
- How To Trust Your Real Estate Agent in NYC
- 5 Reasons why living in a doorman building in NYC is worth it
- 5 Great Luxury Apartment Buildings in Manhattan You Should Know
- Understanding NYC Real Estate Terms to Your Advantage
- How To Price Your Inherited Home In Philadelphia For Sale
- Purchasing A Home In Villamartin
- What Are Tensile Structure Fabric and Frame Materials
- Finding Luxury Rentals in NYC
- How To Buy A House in Scotland
- Sell Your House In Los Angeles
- The Importance of Real Estate Photo Editing Outsourcing
- The Importance Of An Inventory For Both Tenant And Landlord
- How to Identify a Qualified Commercial Broker?
- How Much Does It Cost To Sell a House in Scotland?
- How Much Does It Cost To Sell a House in Scotland?
- Tricks Of The Trade For Crafting Compelling Real Estate Copy
- Fire Detection System Protection for Real Estate
- Why do Tech Start-up Companies Love the Triangle?
- Utah Land Development
- Reasons To Hire Professional Cleaners For Bond Cleaning Services