DUE DILIGENCE IN BUYING IN TODAY'S REAL ESTATE MARKET!

Buying an investment property, a residential income property, a flip or any type of real property in today's real estate market requires more due diligence and a discerning eye than ever before.  While investors, business owners and owner occupied buyers are seeing record lows in real estate prices, it seems very evident that many buyers are buying 'lemons', 'headaches', 'money pits', 'nightmares'...etc..The chances of this happening to you are less likely when you follow the Golden Rule in real estate investing..... 

What is the Golden Rule?  YOU make your money when you BUY.   I know this seems like a backward concept to my blog viewers.   Think about this concept for a minute....  When you ACCURATELY know how you will spend every dollar on a property BEFORE submitting an offer, you can invest with confidence with a unshakable certainty your return on investment (ROI), your NET PROFIT!  

Here are key items you must consider with EVERY real property you buy as investment property (income generating or flip (quick turn).  

• Confirm ALL repair costs, this is NOT an estimate, this is a CONFIRMED dollar amount.  Why is this so important?  This is often overlooked with inexperienced investors.  Many beginning investors are so over zealous in making 'quick money', they believe that they are qualified to make ALL repairs and more importantly, cut corners by waiving thorough professional home inspections.  Many hidden damages or deferred maintenance problems can include structural foundation damages, entire structure electrical wiring damages, major plumbing issues hidden in raised foundation older built homes.  These are just a few major and yet very COMMON mistakes that has the ability to bankrupt a beginning investor. 

• Confirm exact dollar amount for down payment, repair costs, operation costs TOTALS.  This another key that is so important.  Why?  Every dollar you put into your purchase as an investor, you must know how that equity dollar will make you profit every year you own the property.   Be an expert on how to 'leverage' when buying investment property.  It is similar to the concept of 'using other people's money' to create profit.  What does this mean?  You find and establish relationships with a hard money lender and reputable direct lender and/or mortgage broker.  These people will be your allies when you begin building your portfolio of real property assets.  

• Establish your ROI (Return On Investment) minimum and commit to that amount.  Never, ever waiver from that amount.  In today's real estate market, it is best to be conservative because of the volatility of the property prices.

• Create a dynamic team that includes, an experienced escrow and title company who understands investment property sales and purchases, a State experienced licensed general contractor, an experienced licensed real estate professional (who knows how to work with investors, who will scout for great properties to purchase and who will sell your flips quickly and efficiently)

• Exercise PATIENCE and be over the top thorough with every property you consider purchasing! 

• Never become emotionally attached to any investment property you are considering for purchase.  Treat every investment property as a business decision ONLY!  You may save the emotional attachment for your personal residence.  

• Building your financial future with real estate investing is fun and exciting.  When conducted with an educated mind, it affords many options for your future and secures a lifestyle that can be hugely rewarding!