Many new real estate investors begin and they want to do it all. They are just starting and want to do buy, fix and flip, rentals, wholesaling, tax liens, lease options etc. It is such an exciting time. It is always very exciting looking at properties and trying to figure out a way you can get the best deal. Some new investors often believe the best deals are the cheapest or the least expensive properties in an area. I often see many investors competing for these cheap properties. At times they even drive up the price more than they should be they let their emotions get involved with their financial sense. These cheap properties often require an extensive amount of work. The value in the property will be developed as the property is rehabbed and brought to a move in condition.
Before you make the offer you should always know what your exit strategy will be. - Meaning if you get the deal what will you end up doing qwith the deal? Are you going to wholesale the deal to a cash buyer? Are you going to buy, fix and flip the property? We can call this a B.F.F. (and no that is not best friends forever!) :) Are you going to Buy and Hold (BH) the property as a rental? If you are going to BFF or BH you have to have cash or access to cash. If you do not than you must do a wholesale deal such as an assignment or a double close.
When you are ready to make an offer you need to detrmine what your maximum offer will be on a property. When calculating your numbers you have to get good at calculating repairs. The amount of repairs will affect how much you might offer on the home. Therefore, I would strongly recommend you start by not tackling the worst homes in your target area. The ones that need extensive repairs can be good deals but take a lot more time and effort with calculating repairs. That is why I often tell new investors they need to crawl before they walk and walk before they run when it comes to real estate investing.
In real estate there are different levels of rehabs. I classigy rehabs into 3 categories Light Medium and Heavy. New investors tend to gravitate toward the heavy becuase these often are thcheapest deals because they need the most rehab. New realestate investors should focus on light rehabs and learn them. Then go to the medium and then when they feel confident in calculating their numbers go on last to the heavy rehabs.
Go out there, take action and start your new day. Today you might be crawling with action or walking with action. Make sure you start slow and build up speed. You should realize that you will be running with action soon than you think. When you start dreaming about real estate, you are running! :) CRAWL, WALK, RUN! Believe and Achieve! :) - Joe