Four Steps to Real Estate Investment Success
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| Four Steps to Real Estate Investment Success |
Real estate investment is never a bad idea, and it may be quite profitable at times. When the market is hot, hundreds of real estate seminars begin to roll out around the nation, and thousands of consumers spend thousands of dollars on investment courses.
It's surprising to find that only approximately 5% of the thousands of enthusiastic attendees at these seminars actually acquire an investment property. Why? The real estate gurus sell the "sizzle" and make benefiting from real estate seem simple. The fact is that, although simple, it is not easy.
Here's a quick method to help anybody start establishing financial freedom.
Investing in single-family houses involves four main steps:
1. Purchase a house for less than its full market worth. Yes, individuals do sell properties for less than their full worth. You should know that most homeowners will only accept all-cash offers within 5% to 10% of their asking price.
The successful investor learns to identify financially challenged homeowners who are forced to sell for less than market value. They have lost their work or been abruptly moved; they are divorcing; they have been living above their means; the family has been overburdened with medical costs; and, very frequently these days, their money has been used to sustain a drug habit.
These are instances of motivated sellers. The seller will accept any offer but all cash.
2. How do you identify motivated sellers? You work at it! As with every organization, it is critical to have a little marketing strategy. The Fuller Brush firm demonstrated 75 years ago that door-to-door sales is a basic but very successful method.
You are offering your talent as a house buyer to folks who need to sell. The moment they need you, you can help them solve some of their issues. Door-to-door prospecting allows you to learn more and acquire more properties faster than any other strategy. However, most individuals are unwilling to go from door to door for three or four hours every week. Okay, there are other options.
Watch for foreclosure sale announcements in public notifications. Meeting with a house owner immediately after receiving notice that they are about to lose their home enables you to work with a highly motivated seller. Probate, divorce, and bankruptcy are examples of public announcements that provide purchase opportunities. Follow the Homes for Sale listings in your local newspaper or on the internet.
You may contact the people listed in these announcements by phone or, for the quickest response, send a postcard expressing your interest in purchasing their home. It will generate purchase chances, but not as many as human contact.
3. Once you've located a motivated seller, you must learn how to structure an offer that benefits both you and the homeowner. A skilled real estate investor rapidly realizes that this is not a business of taking property but of resolving difficulties in ways that benefit the seller.
The homeowner is in a difficult situation, and you may spare them from public humiliation while also providing them with some financial assistance to establish a fresh start.
No investor can afford to leave cash on every transaction. Only Bill Gates has that much money accessible. You must use inventive strategies such as leasing, options, and taking over mortgage payments. These transactions need little to no cash. You may discover a wealth of reasonably priced instructional literature on such topics in bookstores or on eBay. The same instruction that seminar attendees pay hundreds of dollars for.
4. You earn a profit when you purchase! Never make a purchase unless you've thoroughly calculated how you'll earn a profit. Will the monthly rental income be sufficient to meet the monthly mortgage payment if you retain it for a long period? Will you sell the deal to another investor for quick money? Will you make some improvements and sell the property for its full value? Will you immediately exchange it for a more attractive property? Make a strategy before buying.
There are four phases that any part-time investor may go through in three to four hours every week. What is the missing ingredient? Your drive and persistence. If you stick to the plan for a few months, you'll be well on your way to financial freedom.
Summary:
Real estate investment is never a disastrous idea, and it may be quite profitable at times. When the market is hot, hundreds of real estate seminars begin to roll out around the nation, and thousands of consumers spend thousands of dollars on investment courses.