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Costly Mistakes To Avoid In Wholesale Real Estate Investing
| The easiest and fastest way to make money in real estate investing is flipping houses, also popularly known as wholesaling houses. Little to no upfront money is needed for each deal when wholesaling houses. To be successful in real estate investing flipping houses, here are a few things you must avoid. 1) Do not buy in bad neighborhoods Few people or real estate investors would like to buy houses in risky neighborhoods. Keep away from buying in these areas if you want to sell your houses fast and easy. Identify nice, neat, attractive and medium class neighborhoods. 2) Never fail to inspect your houses Start with an informal inspection. Pay particular attention to exterior appearance of the house, since this is the first thing a buyer sees. This is important. 3) Never get generous on comparable sales The more conservative you are at estimating fair market value when you buy, the less likely you are to make a high offer that leaves no money for you or your real estate investor buyer that you wholesale the house to. 4) Never under-estimate repairs Your profits or those of the wholesale real estate investor buyer are directly dependent on the repair estimates you make. Never get conservative with repairs or you will pay too much when you buy. 5) Do not pay too much when you buy You might think this sounds obvious, but this is the most common real estate investing mistake. The assumption is you have your numbers right � conservative comparable sales, generous estimated repairs and equity before buying it. Your potential profit must be taken into consideration before making your offer. This way your offer can never be too generous. I by no means shy away from letting the seller know that even though my profit might seem high to him, I must give a big discount when I sell my houses to sell them fast. In a buyers market, this always works. 6) Never spend too much In flipping houses, the goal is not to do any repairs, but to pass this on to the wholesale real estate investor buyer. Every now and then, you may find it crucial to do some light fixing up, such as hauling off trash cleaning up the yard, or such light tasks that make the house more visually appealing for sale. Even though the goal is to flip the house to another real estate investor, at times it is vital to fix petty jobs that could blow up estimated repair costs that could eat up into your profits. Stick to a tight budget. The more generous you get the less you make. 7) Do not keep all the profits to yourself The intention of every real estate investor when they buy any house is to make a profit. When you do your math, you have to take into consideration the fact that you have to make a profit, and the real estate investor you sell to must make his profit too. S long as you allow a profits for you and your real estate investor buyer, you should be able to make profits flipping houses. When you stick to these rules, you will have a successful real estate investing business flipping houses. |
About the Author
Simon Macharia buys and sells houses in Dallas TX. He particularly likes to flip houses, running and automating his business through his real estate investing website
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