The path to the perfect real estate investment can be rocky: watch your step.
Like climbing a mountain, finding the “perfect” real estate investment requires your full attention and navigation skills. To be successful, Real Estate is a field that typically requires seasoned professionals at the wheel. Through experience, successes, and failures, these professionals have learned how to make the right decisions, and to strike at the most opportune times.
As someone who has been in this business for many years, it is fair to say that I haven’t met many “natural-born” real estate investors. What I see most is first-time investors with little experience, who have relied mostly on second-hand accounts of what it takes to be a successful real estate investor. Although they’ve yet to make their first purchase,they can rattle off numbers as if they were to the manner born.
Fair enough: No one wants to be thought of as uninformed, inexperienced, or foolish. But that’s often the result when I ask, “How much to you plan to make?”and am met with silence, or more numbers that aren’t grounded in realistic expectations.
On an average day, I receive all types of calls: Some concern cheap property that someone wants to purchase and flip; Some are“what if’s” (“What if I got the property for 50k less?”); Some—and by far, the most common—concern foreclosures that“I found online. I want to buy them, fix them up, and resell them.”
I learned long ago to take every call, no matter how ‘silly’ the question. I also learned to do my best to understand why the client thinks a deal is right for him or her. I once received a call about a piece of property in Atlanta from a man who was driving his car on the 405 freeway in California. Surfing the web for deals while knowing little about your market is as dangerous as surfing the web and driving.
Luring unsuspecting investors has become a business in itself. We see signs on street corners: Income Generating Property, Investors Dream, Instant Equity—all scams created to encourage the unsuspecting and uninformed to drop their money on losing properties.
Before people go the investor route, they need to ask themselves important questions, things like, “What are my goals?” and “What specifically needs to happen in order for me to reach my goals?”
These questions are rarely asked when people make the decision to get into investing, but once that decision to invest has been made, these questions must be answered. And the answers should come from people who are experts in the field with specific insight into the demand for homes, the cost of construction repairs, lending attitudes from mortgage companies, neighborhood trends, etc. This invaluable information takes time to gather and review.
When deciding to become a real estate investor, keep these tips to keep in mind.
- Know your market
- Know your financial parameters
- Have a plan in place
- Calculate your risk
Merrick Damon Williams
MerrickDamon Residential Brokerage
Georgia, Florida, Costa Rica