When investing in real estate, there are some key dos and don’ts to remember at all times. These are useful to have at the forefront of your mind whether you are an experienced professional developer or somebody looking to buy and sell property for the first time.
Each individual case, developer, portfolio, and property is, of course, different. However, the following tips work as a general rule for the profession.
Do – Fix and Flip
For those unaware or unfamiliar with the term, house “flipping” or to “fix and flip” is to purchase a property – usually at a low price because of its poor condition – renovate it and sell it on for profit.
The practice is of popular culture interest across the United States, inspiring many television shows such as Fixer Upper and Design on a Dime. There is even an addictive video game based on the premise.
For those interested in fixing and flipping homes as a way of investing in real estate, initial loans to get you started could be exceptionally useful. These short-term loans from hard money lenders are exactly what a buyer needs to stump up the funds for quickly converting an unlivable house into a cozy home and making a profit.
Don’t – Rush into a purchase
Whether it’s fix and flip, new construction or buying to rent, there is rarely much to be gained from rushing into an acquisition.
Read through legal documents, view the property, check local prices and make sure you familiarize yourself with some common house-buying mistakes before leaping into a purchase. To be successful as a real estate developer you will need to learn how to be calm and calculated in everything you do.
Do – Seek help from professionals
Whether it be money lenders, contacts you have in the business or local tradesmen, always seek help from professionals when you are unsure about what course of action to take.
Getting multiple points of view and opinions before making a decision on a purchase, a sale or anything in between will increase the chances of getting it right. Being a lone wolf and doing everything yourself will be stressful and potentially costly.
Don’t – Compromise when you could make more
When in the real estate business, you are sure to have to make some tough calls. Sometimes, for that reason, it can be very easy to give in and compromise when you shouldn’t.
Investopedia notes that while compromises may be needed on some aspects of home buying, they should not be made for anything that could result in future disappointment or major stress. When investing in real estate to sell for profit, this is especially important, as any shortcuts or compromises you make could jeopardize getting the return on investment you require.
Do – Keep going even when it’s tough
Simply put, working in real estate development is not always easy. Markets rise and fall, budgets spill over and deadlines for construction are not always met. What is important is that you keep going even when it is tough, and channel positive energy into overcoming obstacles.