Always a Better Idea
Investors like to think out of the box. You can always tell an inexperienced investor. They always think that all they need to do is look and they will find investment properties no one else will see. They expect to be the only person looking for distressed properties they can buy for nothing, throw in a weekend of work, and resell for a fortune. They actually believe they are the only person smart enough to carry out a simple plan as if it were an original idea. Then an investor gives you a call. They actually have funds in the bank for a cash offer. So you take them out to look at properties. Of course they start at the bare bones lowest price. They are convinced that someone is selling a property with no idea what it is really worth. The investor thinks that and they are going to buy a property and resell it next week and make a fortune. Of course they are rather shocked to see the lowest priced properties. They are old and in the worst shape. Many have water damage and mold. Most had their electrical and plumbing stripped out, and everything including the kitchen sink is gone. Holes are punched out in walls to grade a few feet of copper wire. Some basements are flooded and some basement walls are cracked and leaning. The investor envisioned a pristine property and expected to be the only Buyer looking at that property. After one day of showings, the Investor should take notice of the wake up call. Flipping is a tough, competitive business and is not as easy as the guy on TV says it is.
Then the Investor gets a brain storm. Their plan is to collect a series of properties, rent them out, sit back and collect rent every month, and lead the easy life. Since looking at the cheapest properties didn’t work, they think of a Plan B. One of those plan B’s is to look at condos. Condos are less expensive and there is less competition. The problem is, you need to read the condo papers. In most cases the condo association will not allow owners to rent units, rentals are only temporary, or the association allows only a limited number of rentals. And guess what? Someone beat them to those rental units and the association will not allow any more.
There is nothing new under the sun. Investing requires a lot of hard work and research. No one is going to make money in Real Estate when they are convinced all of their ideas are original ideas.