Avoid These 5 Common Real Estate Investing Mistakes

Given the slow nature of the real estate market, any fledgling investor faces a tough battle against the competition when purchasing and reselling properties. To make sure that you are on the right track, it is best to take a cue from the experience of veteran investors—learn from their mistakes, and you will soon make your business profitable. Here are five blunders you must avoid in real estate investing.

1. Failure to build contacts

Certain market conditions compel investors to enlist help from professionals in completing real estate deals. That being said, you must tap every potential contact that can aid you in buying the right property. Your list of contacts may include experts such as lawyers, insurance agents, real estate agents, accountants, home inspectors, and repairmen.

2. Acquiring bad financing

Many homebuyers make the mistake of getting interest-only or variable loans when the interest rates are high. The ideal time for buying properties is when the interest rates are low. This gives you the flexibility to pay the loans.

3. Failure to factor in all the expenses

Make sure that you take into account all the expenses such as maintenance, renovation, and furnishing the property. Even minor expenses such as taxes and insurance should be anticipated as well.

4. Lack of research

You need to ask plenty of questions about the property and the area where it is situated. What items must be replaced in the house? Are there any problems in the area? Why is the homeowner selling the property? Do I need to buy a home warranty as well? These are just some of the questions you have to ask when choosing the property to purchase.

5. Overpaying

Looking for the right property is a time-consuming process. That is why many buyers tend to overbid when they find a house that fits their needs, hoping that the seller would accept the bid. As a result, these buyers accumulate more debts and are forced to pay more than they can afford. Avoid this mistake because it can hurt your chances to make money investing in real estate.

New to Real Estate Investing? Know the Basic Rules

Want to become successful in real estate investing? You need to keep in mind several things about the real estate business, especially if you are a beginner. Awareness of the basic rules of real estate can help you survive the business and make more money from it. You may experience several difficulties at the start, but not giving in to pressure ensures your survival in this competitive area.

Learning the real estate basics

Investing in real estate is the first thing that a beginner should learn. Real estate investment entails purchase and sale of residential and commercial properties. It also involves property appraisals, real estate transactions, and lending and mortgages. Beginners need to be familiar with the many real estate jargons such as home warranties, foreclosures, house flipping, and more so that they won’t be lost in the process. They also need to understand the government laws concerning property, real estate transactions, and ownership transfer laws.

Being competitive and strategic

Competitiveness is the key to success in the real estate enterprise. Being a great investor involves the ability to strike the right deal. If you are negotiating with rich customers, you need to ignore their whims. It is possible that they express desire to sell their property, but then decide to withdraw the sale in less than a week. Thus, your persuasion skills to make your customers agree with the sale are also important.

Developing lots of patience

Patience is another key to success in the real estate business. It is because an investor may need to wait for a long time until a property gets a good value.

As you can see, real estate business is not a walk in the park. It demands a great deal of skills and hard work in order for an investor to survive. And for ensuring success, it requires patience and competitiveness.

Short-Sale Pre-Foreclosure Investing Advice: How to Negotiate with a Homeowner

Are you into short sale pre foreclosure investing? If you are going to negotiate with a homeowner, the best way to make a good connection is to approach that person directly. You’ve got to get the short sale, so take your time to do the necessary preparations before you start your short sale negotiation.

Be prepared before talking to the homeowner

Planning what you are going to say is a crucial step in your pre-foreclosure deal. So collect adequate information about pre-foreclosure investing because it will come in handy when the time comes you have to talk to the homeowners.

Be courteous and respectful

Before you introduce your proposal to a homeowner, ask the homeowner if he or she is willing to spare a few minutes for the short sale negotiation.

Be strategic and tactful

At this point, the negotiation for the short sale will begin. A good strategy for opening a conversation is to talk about jobs, kids, or pets and then slowly shift the topic to the pre-foreclosure deal.

During your conversation, try to avoid mentioning “foreclosure” or suggesting in any way that the homeowner is to be blamed for the pre-foreclosure. It is important to make the homeowner feel that you are on his or her side.

So how can you be careful while being honest? Instead of saying bluntly that you have noticed that the homeowner was not keeping up with the payments, you can say that you have noticed that the bank was going to foreclose on the property.

Or you can say that, according to your research, the homeowner was having problems regarding the property. The homeowner is facing a financial difficulty, and you do not want to make them feel more miserable by giving them the impression that you are going to take advantage of the situation.

Once you have already gained the trust and confidence of the homeowner, you can begin the discussion on your main purpose, that is, to offer help on the pre-foreclosure.