9. Be realistic about the sales price. If every 3 bedroom in the neighborhood sells for 200,000, nobody's going to pay you 220,000 just because you're a wonderful person. Know what sells for what & rents for what in the neighborhood and be realistic about the end price. Yes... Rehabbed properties sell & rent for a premium, but that should factor into you price. Actually, this is a perfect intro to number eight.
8. Do quality repairs. Hopefully, you're in this for the long hall. Most investors concentrate on a particular neighborhood. Neighbors talk to & trust their neighbors. If you do quality work, they'll probably tell their friends, family & neighbors to buy or rent from you. If the work stinks, they'll definitely tell their friends, family & neighbors to stay away from you. While we're on the subject of work, this is a good way to start number seven.
7. Know what work to do I what areas. There are certain areas where luxuries like Jacuzzis, marble counter tops & hardwood floors are almost a prerequisite for selling a property at a top price. There are other areas where it will barely get you a few dollars more and it certainly won't cover its cost to put in. Know the difference. This actually has nothing to do with number six.
6. Do your math. 2 plus 2 always equals 4. I can't tell you how many times investors call me with a deal and they just never took the time to calculate all the costs, including realtor, transfer tax & carrying costs. After doing the math, the deal stinks and they're actually wasting everyone’s time including their own. Speaking of wasting time, here comes number five.
5. Be as good as your word. This one should probably be number 1 or 2, but the list flows better this way. Don't ever waste people’s time and don't ever lie. It’s not worth it. When you’re honest and you never waste people’s time, you'll soon get the reputation as a serious person who gets things done. People will flock to do business with you, because of it. I can't stress how important this is. Here comes number four.
4. Most contractors stink. Ok... Maybe I shouldn’t make a generalization like that, but most contractors still stink. If you’re a good contractor, maybe you're the exception. You have to be very careful. Some contractors will do shoddy work, not complete the job when promised, try to pass of worse materials, stop returning your phone calls or never show up again once they cash your check. You should inspect the job site a lot and never give them too much money before the job is done. After that, number three will sound a little more positive.
3. Do your homework. Educate yourself on investing. You wouldn't attempt surgery after reading one medical book or attending one seminar. Would you? Read books listen to tapes & attend seminars. Here comes number two.
2. Network with other investors. The best way to meet other investors is to join the local investor club. Different people specialize in different things. Some people are great at finding good deals. Others are great at rehabbing. Some are great with managing rentals. Find your niche and then find partners to fill in on what you're not great at. Everyone has to bring something to the table. Figure out what you can bring and the deals & money will come pouring in. Now for the number 1 reason...
1. I'm not really supposed to put plugs or advertisements in these articles, but the number 1 mistake most investors make is they don't use me for their financing. Let's see if they publish this.
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