Many real estate market analysts' reports scare away beginning real estate investors. According to a recent study conducted by Global Insight and National City, a significant number of America's housing markets are, in the words of the study itself, "extremely overvalued."
Experienced investors know this negative report translates to good news in five ways:
- Less competition from home buyers
- Extremely motivated home sellers
- Cooperative real estate agents
- Hungry loan officers
- Un-harried closing agents
Here are five keys to open the door to your dream investment portfolio:
1. Research and Keep Records
Become the EXPERT in your targeted geographical location. For beginners, this means choosing ONE area or neighborhood. Keep records of the following statistics:
- How many houses for sale in your specific area?
- How many sold last month?
- How many days did the house sit on the market?
- What did the house sell for?
- How much of a discount?
- What concessions did the sellers make? Call the sales agent and ask if the owner provided seller's closing costs or seller financing.
Follow your real estate market. Look at houses for sale. Don't merely rely on statistics from a real estate agent, your loan officer, or closing agent. When you get a list of comparable sales, check the houses out. Drive around on "Open House" weekends and see how the houses present themselves.
Whoever said "knowledge is power" knew what they were talking about when it comes to buying and selling real estate. When you know the heartbeat of your market, you will know which property will make a great investment.
2. Spend Less Money Fixing Houses
Save money on building materials, paint, and appliances. Check out ReStore--Habitat for Humanity's retail outlets where quality used and surplus building materials are sold at a fraction of normal prices--for building materials, hardware, lighting, doors, and oops paint. Find an appliance discount store that offers like-new or scratched appliances for half price.
3. Design to Sell - Don't Just Blow 'n Go
Rise above the typical investor's "blow 'n go" approach. Don't just spay paint everything white and install boring beige flooring. Research your target market and use colors and decorating details you know attract your profiled home buyer.
4. Home Staging
In a buyers' market, home staging becomes more important to sell for top dollar. You don't need to furnish a vacant house, but a few staged decorations help buyers visualize living in the home. Your goal--set up suggestions of activities that buyers connect with so they daydream about living in your home.
5. Sell Your Home Fast
Stay ahead of the real estate market: sell fast. Don't waste your precious time showing to other investors. Look for home buyers who can't wait to LIVE in your home. Negotiate with real estate agents on commissions; know what services you will need and shop around. If you select a full-service agent, make sure you get what you pay for including their opening the home and turning on the lights and air conditioning for other agents' showings. Guard your sale. Keep the home buyers motivated and keep the house in order for the all important date--appraisal day.
Learn how to fix and flip houses and make money in any real estate market!