If you’re starting out in real estate investing, the first thing you’ll need to do is know your market.
Where Are You Investing?
You need to know the market to know if you’re getting a deal or not. Is the area seeing a lot of sales, or are the properties lingering on the market for a long time? Even in a soft market, you can make a profit. This is because there are always sellers.
The idea is to find the motivated sellers that will really be looking to unload their house. A profit can be made in any kind of market. You just need to be prepared and know what you’re getting into from the get-go.
What Features Sell?
As I said, regardless of the market, people will be selling and buying houses. As you investigate the market, find out what features sold the property. In the case of finding the fixer-uppers, you’ll want to know about the cosmetic things, nothing structural. Making structural repairs can drastically cut into your profit. But pay attention to the types of things that attract buyers and see about incorporating them into your strategy.
Enhancements like replacing walls, plumbing, structural beams, sub-flooring, and electrical systems can certainly be done – and have been done – by investors such as you. However, the successful ones are only successful after many years of investing; it should not be done by anyone brand-new to real estate.
The bottom line: an ugly house could be your cash cow
Fixer-uppers are that way because they need work. Maybe the yard is overgrown and in disarray. Cosmetic repairs can be simple enough to do. You should embrace the garbage-filled houses, stained carpets, and nasty odors. These are all things that you can fix – and see a profit on when complete.
Real estate isn’t rocket science. The trick is to really understand the market that you operate in. Especially in today’s market where you can become unstuck very quickly. Let’s face it, anyone can make money when the market goes up. The real magic is making it when things aren’t so hot.
Which is why research is the biggest risk-minimization method you can adopt. And I ain’t talking “lazy” research either. I’m talking about getting off your butt and inspecting real houses. If you aren’t prepared to do the hard yards… don’t expect to make easy money!