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Position Yourself For Success

5 Critical Questions For New Real Estate Investors

There several ways to invest in real estate with single family homes, condos, multi-family and commercial. But before you can invest in real estate, you must answer a few questions.

5 Critical Questions For New Investors
Do you have cash or access to cash to buy real estate?
Are you looking to replace your current income?
Do you have great credit?
Are you just looking for cash flow?
Are you looking to build long-term assets?
If your answer to question number 1 was No, then you can only focus on a few strategies like wholesaling, lease-options and seller financing. Once you generate some income, you can move into other real estate strategies.

If you answered Yes to the second question, I would be focusing on wholesaling, lease-options, and seller financing.

If you answered Yes to question number 3, I would be focusing on the real estate strategy retailing.

If you answered Yes to question number 4, I would be focusing on lease-options and seller financing.

If you answered Yes to question 5, I would be focusing on seller financing and retailing.

How Should You Invest in Real Estate?

How to invest in real estate really depends on your goals and finances. First write down how much money you could use to invest in real estate. Second, write down a list of people that have money and would like to invest in real estate. If this equals $0, then you cannot focus on retailing/fix and flip.

You will find yourself running in circles doing nothing. If you do have some money to invest, start with the foreclosures since there everywhere and you may wind up finding a great deal.

Answer the questions above truthfully and you can’t say yes to all of them. I want you to pick one or two to start. This will ultimately determine how you should invest in real estate.

7 Essential Deal Evaluations Tools

Here is some basic real estate investing information that walks you a deal in 7 steps. These tools are all great for evaluating leads.

1) Location:

The location of the property will usually determine what techniques you can use. Generally, Ugly Houses = Wholesale or Retail. Nice Houses = Options, Lease-Purchase, or Owner-Financing. Here’s what to look for:
Ugly homes in need of repair.
Properties in appreciating areas.
Properties that have easy terms.
Properties with seller financing.
Properties located in high rental markets.

2) Real Estate Bargains:

No matter what technique you use, you want to find good bargains. The better the bargain, the more you profit. Real estate bargains are usually the result of highly motivated sellers.

3) Motivated Sellers:

Motivated sellers are sellers that are in situations they need help with. Usually their property is the problem. Motivated sellers make good real estate deals for us. Be sure to write down all real estate investing information about the home

4) Gathering Information:

Gathering information will help you stay organized and give you the best possible analysis of a property. Be sure you have a Property Research Form, Property Inspection Sheet, and an All Cash Offer worksheet. Other information you will need is Repair values, qualifying the seller, and financing. Use all necessary information that can help you with your buying decisions. You will profit when you buy and realize it when you sell.

5) Contracts:

Your contracts must be bullet proof. You should always consult your attorney before using generic forms found online. There are several factors to consider when using contracts, for example, state laws.

6) Use Other People’s Money (OPM):

Whenever you can use someone else’s money, you have tremendous leverage. The seller will still receive what you have agreed upon. Here are some ways to use other people’s money:
Banks
Other Investors
Friends
Subordination Technique
Substitution Of Collateral Technique

7) Closing:

As the buyer, you can choose a Title Company to close your real estate transaction. A Title Company researches the title for any defects. They will then close your deal and give you title insurance.

There’s a lot of real estate investing information out there but follow these 7 basics steps to get you started in real estate.

Position Realty
Office: 480-213-5251

SPEND A LITTLE, RAISE THE PRICE A LOT

Your real estate professional is probably advising you to declutter, stage your home, plant new flowers, and make numerous repairs and updates. You may be reluctant to get started because of the costs, but according to home valuation site HomeGain, improvements like these can actually make you more money when you sell your home.

Under HomeGain’s Tools for Sellers, you can find the Home Sale Maximizer tool, where HomeGain has identified the top 10 home improvements under $1,500.

These add the most to home sellers’ bottom line, and are recommended by over 600 real estate professionals across the nation.

The top 10 home improvements are listed by the greatest return on investment (ROI):

Cleaning and de-cluttering ($290 cost / $1,990 price increase / 586% ROI)

Lightening and brightening ($375 cost / $1,550 price increase / 313% ROI)

Home staging ($550 cost / $2,194 price increase / 299% ROI)

Landscaping ($540 cost / $1,932 price increase / 258% ROI)

Repairing electrical or plumbing ($535 cost / $1,505 price increase / 181% ROI)

Kitchen and bathroom ($1,265 cost/$3,435 price increase/172% ROI)

Replace or shampoo carpets ($647 cost/$1,730 price increase/169% ROI

Paint interior ($1,012 cost/$2,112 price increase/109% ROI)

Repair floors ($931 cost/$1,924 price increase/107% ROI)

Paint exterior ($1,467 cost/$2,222 price increase/51% ROI)

When you put in your zip code, your results may vary from the survey results, but what’s interesting is how consistently the surveyed listing agents recommended the same home improvements. Nearly 100% of listing agents recommend cleaning and de-cluttering, while 97% recommended lightening and brightening and 80% recommended staging. These top three categories cost just a little over $1,000, yet netted sellers $5,734 at closing.

One hundred percent of HomeGain real estate agents recommend painting the interior and cleaning the carpet and ninety-eight percent recommend decluttering., but you may be surprised to learn that the top three money-makers in terms of ROI aren’t necessarily what agents most often recommend.

Cleaning and decluttering: Remove personal items; wash and clean all areas inside and outside of house; freshen air; remove clutter from furniture, counters and all areas of the home; organize closets; polish woodwork and mirrors, etc.

Home staging: Add fresh flowers; remove personal items; reduce clutter; rearrange furniture; add new props or furniture to enhance rooms; play soft music; hang artwork in walls, and more.

Lightening and brightening: Open windows; clean windows and skylights inside and outside; replace old curtains; remove other obstacles from windows that block out light; repair lighting fixtures; make sure windows open easily, among other suggestions.

It’s all about first and favorable impressions. It takes money to make money, but it doesn’t have to take a lot. It’s the return on investment that’s important.

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