Real Estate investing can be a very interesting and profitable business. As in most business ventures, there are many basic facts to consider and master. Frankly, it’s not “Rocket Science” but you do need to understand the basics. I’ve written this article based on my actual experience as a successful real estate investor.
Tip 1. Arranging for Finances: Steps to Start Buying Houses: When you start buying houses, there are several directions to go in arranging for the money that you’ll need to make the purchase, pay for the repairs, advertise the house when it’s ready to sell, and hold the house until it sells.
Obviously, having access to adequate funding is of great importance. It might seem to possibly be a daunting task until you actually understand that even in a tough economic climate, there is money available. You just need to be a little creative in discovering the sources. Sources of finances include: Personal funds, Private Investor’s funds, Bank funds, Hard Money Lender funds, and Creative Financing funds. Personal funds are liquid funds you personally have or funds you can raise by pledging your personal collateral equity. At first, these personal funds or personal equity are not normally used when you start buying houses. Private Investor funds: This can be the most important source of funding your purchases. You may contact potential private investors by direct mail, a website, face-to-face, telemarketing, etc. The message to Private Investors is something like, “Would you be interested in making 10% to 15% on your investments? The investment is secured by real estate and you never invest over 70% of the market value of each investment.”
Tip 2. Learning to Determine Present Home Values: Steps to Start Buying Houses: This is not really “rocket science”. The market value is determined by what other similar homes in the nearby area have recently sold for. All realtors have access to that information from their MLS (Multiple Listing Service). Having or knowing or working with a friendly realtor can make it very easy to get this information. You may want to check out Dallas Home Buyers for more.
Tip 3. Getting a Handle on Estimating Repair Costs and Time Needed to Complete Steps to Start Buying Houses: Repair estimating is an extremely important needed skill as part of your real estate investor. Using a method that focuses your attention to detail is the way to go. Little things can make a big difference in your bottom line.
The best way you approach this is to make a list of the various parts of the home. Things like, Exterior Front, Exterior Back, Living Room, Kitchen, Bath #1, Bath #2, Dining Room, Master Bedroom, Bedroom #2, Bedroom #3, Garage, etc. For each of these areas you make a sub-list. Example: Kitchen (this is the most important selling room of the home), Lighting, counter-tops, upper cabinets, lower cabinets, drawers, sink, sink fixture, dishwasher, disposal, stove, etc. To each item you set a planned “installed” price range: (Example: Sink Fixture $85.00 to $250.00). You get this price range by going to Home Depot, Lowes, or wherever, price the range, then add the install cost based on time to install times hourly rate you plan to pay. You should be able to create a form for all of the above on one, or maybe two, sheets of paper. Also, the bottom of the form should have an Offer Section where you will calculate your offer to the seller. This Offer Section should start with Projected Sales Price, less all of the expenses, less the planned profit you want. The resulting bottom line would be the maximum offer you could make to the seller.