New to Real Estate Investing - CRAWL.....WALK.......RUN!

By
Education & Training

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

Comments (4)

David Gibson CNE, 719-304-4684 ~ Colorado Springs Relocation
Colorado Real Estate Advisers LLC - Colorado Springs, CO
Relocation, Luxury & Lifestyle residential

Joe,

 

I encourage new investors to start building their list of potential buyers before they invest in anything. Once they have qualified buyers lined up THEN help that buyer get into a property whether that means assigning a deal or doing a flip.

Sep 21, 2015 05:18 AM
Joe Jurek
Orlando, FL
Real Estate Investor

David, great advice, the Buyer should always come first.  I always say it is the What, Where and How Much? What type of property does the buyer want.  Where does the buyer want it - Location, Location Location. Lastly, how much is the Buyer willing to spend.  Have a great day.  Believe and Achieve! :) - Joe

Sep 21, 2015 06:29 AM
Janice Zaltman
United Realty Group - Boca Raton, FL
South Florida Residential Real Estate

Hi Joe, The successful Investors I know have a crew in place to rehab the property. Finding a contractor that will ....show up...and do a good job in a short period of time is a challenge here. I have the buyers, it's finding the good deals that takes experience. 

Sep 21, 2015 09:58 AM
Joe Jurek
Orlando, FL
Real Estate Investor

Janice, so true the right general contractor can make a huge difference.  I always tell new investors to get 3 bids for their projects and check references.  In regards to generating leads for deals often you have to do what other investors are not doing.  Work with a Realtor but also generate leads by working expired MLS listings, contacting FSBOs, contacting estates, finding deals word of mouth like going to garage sales and joining other organizations to network with people.  Have a great day Believe and Achieve! :) - Joe

Sep 21, 2015 11:20 AM