Property Investment Tips – Buying Distressed And Partially Completed Properties
The distressed property investing business can be extremely profitable. And, guess what?
The real estate investor can also by purchasing the wrong property end up owing a “bad” property accidentally. Here are some tips that the investor can use to maximize the success as a real estate investor and to pick good investment deals.
To avoid the inherent problems that can plague real estate investors that lack the education they need to make great decisions, here are 3 tips you can use to maximize your success as a real estate investor and pick good investment deals.
Target Investment Area Should be Selected Carefully:-
Choosing an investment target area lies in knowing the current market activity and you should know 1) the average days on the market for different types of properties, 2) price to rent ratio in a variety of neighbourhoods and 3) what people want to buy or rent (how many bedrooms, bathrooms, garages, etc. You should choose desirable properties with the right “standard” size and features to help maximize profits. Do not overlook the significance of the price to rent ratio.
Determine The After Repaired Value (ARV) Accurately :-
By miscalculating the (ARV) at the beginning and paying to much or not fixing the property to the appropriate level to conform and sell to the neighbourhood standards.
Many times when real estate investors plan to fix and flip only to end up at their plan B because the property doesn’t sell. This is usually the result of one of two things. To estimate the ARV, let’s first define it.The ARV of the real estate investmentdeal is defined as the true and actual price the property will sell for in 30 to 60 days after completion of the changes and repairs.
Use recent comparable property sales to accomplish this and not “listed” properties. To accomplish this use recent comparable property sales. Do not use “listed” properties nor “under contract” properties to determine the ARV. Recent sales normally prove what the future exit values really are.
In a distressed property market with declining real estate values, this can be confusing to the novice or mid-level experienced real estate investor. It may take time, to become more and more efficient at determining the ARV.
Property Condition Levels Should Be Evaluated:-
There are four distinct levels of property condition in nearly every different neighbourhood.
These levels are: 1) distressed properties that are usually vacant with significant improvements required 2) properties that are occupied in and may have some level of improvement done by a homeowner hoping to sell the property 3) properties that have been recently and totally renovated by local real estate investors and 4) partially completed dwellings where the property owner/builder ran out of cash and could not complete the construction of the dwelling.
Understanding the affect on value of these four distinct real estate property conditions can be extremely helpful as to evaluate the maximum price to pay for any given property. Considering these condition variations is also helpful as to select the level of fix-up appropriate to maximize profits.
Fix It with Price
The old adage that ‘price cures all’ can not be more true than in real estate investing. When in doubt, buy cheaper. If purchasing low enough, it is almost always possible to profit by fixing and then selling low.
The first three tips really are designed to help to buy right. They essentially point the investor in the right direction so that the investor can maximize his/her opportunity to exit and quickly as he/she choose with profits in hand.
Point is that real estate investing is about making profits, getting in and getting out or getting in for the long haul and staying the course. Don’t be greedy, buy right and the real estate investing business will succeed for you.
You may go to the link below this article and get access to one partially completed property that will be sold on Tender