Simple Stuff Every Investor Needs to Know and Do
- Don’t rely on the tax-appraised value of the property. The only true way to establish the market value of a property is through the use of comparable sales.
- Look for a handyman. A contractor who drives up in the new, extended-cab, long-bed Silverado pickup is not the guy for your job.
Close the deal. Never submit a contract unless you are absolutely certain you will be able to close.
- Resist the lure of the big dollar house. High-end homes will put you out of business in a hurry.
- Get the keys. Don’t ever hand over the money until you have the keys and the tenant is out.
- Don’t fall prey to “deal-itius.” As a rule, do not work for less than 20 percent of the total value of the property-even if you currently don’t have a deal.
- I already have a contract, thanks for calling. Build a buyers’ list. Remember: it is easier to find houses than it is to find buyers for houses. Don’t throw names away just because you have a contract.
- Don’t be cheap. There’s a reason it’s called “the cost of doing business.” You have to spend a little to earn a lot.
- Beware of lien windfalls. Spend the time learning the bidding system in the state before buying. Focus on the tax rate of return, not the property.
- Be sure you have the dough. Don’t make a bid if you can’t back it up. It would really be embarrassing to be sued by the county.
Adapted from ARE YOU DUMB ENOUGH TO BE RICH?: The Amazingly Simple Way to Make Millions in Real Estate by G. William Barnett II (AMACOM; June 24, 2003).
G. William Barnett II is Director of Acquisitions at CAPSTONE Properties Group, as well as a nationally renowned seminar leader and speaker on real estate investing. Before becoming successful in real estate, he worked as a stockbroker and a syndicated television producer. He lives in Forth Worth, Texas.
I hope this article will help you in your quest to build wealth through real estate investing. For more articles on real estate investor training, visit my website at www.7secrets4success.com. Also on that site, you may sign up for free reports, articles, and e-books and find free forms, documents, MP3 downloads and much more. Also visit www.turbo-bidder.com for a great real estate investing tool.