There are a lot of details to making a smart investment if you’re a private real estate investor.
For many private real estate investors, maximizing returns and protecting the downside on investments are two of the biggest concerns. Buying distressed properties doesn’t come without risk.
A poorly executed Fix and Flip could be the difference between making a lot of extra profit or losing your shirt.
A successful flip returns higher returns with limited risk. Regardless of what Metropolitan areas you are planning on investing in, here are some pointers to help you more successful on your transactions.
Get Training and Seek the Advice of Real Estate Gurus
If you’re a new Private Real Estate Investor, the more you educate yourself about the industry, the better.
These days, professional real estate investors and mentors are available to train you for your job. There are quite a few details you have to get right! By working with established real estate professionals who already have millions of dollars in deals under their belts, you position yourself for greater success in REI.
Trusted real estate investing mentors are there to help answer questions you have. They have the experience to offer sound guidance.
The Internet has made it easier than ever before for Private Real Estate Investors to connect with experts in the industry. Technology including online conferencing, webinars, and training sessions allow people to advance their careers at a comfortable pace.
Don’t Be Afraid to Use Technology!
There’s no question that technology and real estate investing software dramatically increases your chances of making a favorable deal. Software designed specifically to help real estate investors identify opportunities saves time and effort. The software is invaluable to improving your productivity and tracking multiple projects.
Project management for your real estate investing venture is critical. You want to be sure to track all expenses, forecast revenues, and oversee the progress of contractors. By doing so, you’re taking the needed steps to be profitable.
While using a pen and paper to keep track of all your expenditures is quaint, your data isn’t getting sorted or analyzed in a meaningful way. REI software is an affordable way for Private Real Estate Investors to gain insights on their portfolio at a glance.
All data gets presented in a meaningful way, so you can make decisions based on hard numbers, instead of guessing or estimating.
Build Your Network of Professional Contacts
You can’t have too many connections when you’re a Private Real Estate Investor! The more people you network with, the more opportunities you have to build a strong referral network.
You’ll almost certainly need to find a dependable construction or home renovation company to help out with Fix and Flip properties. Having business relationships with home repair and renovation companies can keep overhead lower.
Having a few connections in the Realty or Brokerage industry couldn’t hurt either! When you complete a project or you’re looking for properties to acquire, you can make a couple calls to find out or more or to list.
It’s helpful to have contacts who can help with funding projects. In many cases, Private Real Estate Investors have to pay for the entire cost of a distressed home purchase in cash. When you’re in good business standing with Private Money Lenders, Hard Money Lenders, Angel Investors, or a local bank you deal with, it’s easier to access funding.
Understand Your Comps
You know which type Private Real Estate Investors who struggle the most? If you answered the ones that don’t understand their comps, you answered correctly!
Without evaluating comparable properties in the area you’re investing in, there’s a greater chance you won’t pay the right price for the property. Comps can be done using research on your own or using software designed for the task.
The better you are at assessing your comps, the smarter you can invest.
Set Goals and Put It All Together!
Just like everything in life, goals matter. Keeping within set deadlines and budgets maximizes profitability.
As part of your goal setting strategy, it’s critical to establish deadlines and budgets for each property.
If your goal is to sell four fix and flip properties a year and you only work on one property at a time, each home has a three-month timeframe for fixing, flipping, and selling.
Optimally, this is what happens for you.
You make great deals and add value to the home. Then you work with Realtors and Brokers to market the home to qualified buyers. They sell your properties quickly and professionally.
Everyone wins and you excel as a Private Real Estate Investor. Goal accomplished!