Not too recently I posted an article 14 Ways to Fail at Real Estate Investing as a New Investor
and thought it covered most of the basics. As I talked with more and more investors entering foreclosure and
failing to sell their properties, it dawned on me that the article needed to be updated. Here are few updates and
revision that are a must read.
15. Not Understanding The Current Market. Every market is different is in some small way. In my
particular market you may not be able buy at 70% minus repair costs. Does it mean 75% or 80% isnt' a good
deal? No. You could always Buy & Hold. Yes, I know it’s a foreign concept to many of us in the new
Flip This House / Property Ladder era but you still create great wealth using the old Buy & Hold method.
16. Forcing The Number. As a previous ActiveRainer mentioned, "Don't Force The Number". If you're buying right,
i.e. 70 cents on the dollar or less... Minus Repair Costs, you should be OK in most cases. Forcing the numbers
to work will lead you down the road of despair. Trust me, I've done it.
17. Copy. This ties in with number 8 but many fail to understand it. The copy portion is
so important that I could write forever. Please note I’m not a copywriter but I do understand the importance of good selling copy vs. words on paper. Outsourcing your copywriting for your ads, business, etc can be one of the costliest expenses. Learn to do it yourself and you save a ton of cash. Stop by your local library or Borders and pick up a good book on copywriting. Email me for a recommendation.
18. Marketing. Goes hand and hand with copy. How do you market your market? How about a nice package deal. Offer a gas card, or something that’s outside of the normal “closing assistance available”. Almost every property has closing assistance in this market, spend the few extra money to get the property sold, make you money, and move on to the next. When the market changes again your marketing can change with it.
19. Selling Too High. Pricing the home too high will cost you big in carrying cost. For quick turnarounds price your property 1% to 2% below the market and you should yield higher traffic than your competition. Also because you did a great rehab and staged it the properly, it’s going to show much better than others on the market.
20. Staging. It's a tough market out there. You need to pull out all the best weapons first. Factor in staging costs in at the beginning of you project and don't have worry about it at the end.
Investor / Realtor