by Steve Majors - The Lazy Investor
TIP #1

No money down real estate usually isn’t.

There will usually be some money required to put a transaction together and make it profitable. It may be closing costs, repairs or upgrading, or just some cash to hold the property, whatever. But somewhere, some money will be needed on every real estate transaction.

You may be able to finance every dollar you need, but it can come back to haunt you in the long run in the form of mortgage payments you cannot afford to make.

Follow good real estate principles and do your homework on the financials, including the total cost of that ‘no money down’ transaction.

TIP #2

Not financially analyzing a potential investment property is the most serious mistake an investor, or potential investor, can ever make. You will hear me say it over and over, time and time again - be sure you do your homework on the financial side of every real estate transaction.

Not taking the time to learn proper real estate principles will get you in trouble faster than anything. You must have a high regard for how well the property will perform.

TIP #3

You can raise the rents on your rental property if you have a carport built. If you have a three-plex and your tenants agree to pay you $30 more per month, that is $1080 more net income annually, meaning roughly $13,500 more value added to your property.
($30 x 3 units x 12 months = $1080 divided by a .08 cap rate = $13,500)

If you can build a carport for $4,000 or even $5,000, that’s a good return on investment right? Can you find out what other improvements the tenants want?

TIP #4

Any way you can reduce expenses raises net income. By installing a new $4,000 furnace that saves $800/year on heating costs you turn a $4,000 investment into a $10,000 higher sales price.

To reduce costs and increase profits on your rental real estate you can also add insulation to reduce the heating costs. Or, if you’re paying $80/month for lawn care one of the tenants might do it for $40. You could buy cheaper insurance.

Look for ways you can reduce your expenses and raise your net income on your rental real estate.

Traditional real estate investments call for certain qualities, such as a good credit record, a sound financial position, an appreciable income, bundles of dollars for a down payment, and good lenders by your side.

TIP #5

One very creative method of offering a seller more than they are asking is to offer More Price for Better Terms. In this creative real estate investing method, the seller usually asks for more money in exchange for flexing the terms of the agreement. An example would be where a real estate seller agrees to extend the payment schedule by 10 years in return for a higher total sales price.

By taking payments for a longer period of time, the seller can make more money on payments as well as the overall price increase. It is also a good deal for you because you have a longer time to pay off the debt which relates to lower monthly payments.

TIP #6

The most stressful part of real estate is during the sales phase, where there are so many things that can go wrong and your profit depends on making everything smooth and quick.

Most sales do go through smoothly, yet the uncertainty and anticipation can keep you worrying late into the night. This is especially true if you choose to sell your real estate on your own.

Selling your first investment property can be confusing and stressful if you do it on your own without the help of an experienced real estate investor or agent.

For your first few deals, seek the help of those that have prior experience and never underestimate the power of your team!

TIP #7

Often real estate investors hesitate to ask the seller why they need the money. They continue assuming needs and knitting diplomatic questions to extract information. The best way is to directly ask the seller what they intend to use it for.

Once you know the reason the seller is selling, you can work with them to provide them with the best offer possible, one that works well for you, yet also provides the seller with what they want.

Oftentimes, you can help the seller increase their profits and lower taxes on the sale by simply working the deal to your advantage!

Make sure you always assure the seller of your help provided you know what they intend to do with the cash and they will usually tell you everything you want to know.

TIP #8

Once you begin your real estate investing career, you’ll wonder why you waited so long to begin. Do not allow yourself to become complacent!

Many investors fall in love with their real estate once they see how well it is doing. When cash flow has been going well each year, they fall in love with their tenants or at least get so friendly with them that they do not maintain rental standards that keep the price where the market will bear.

Or, they see how appreciation has worked its course and fail to watch for signs of falling prices because they want to sell only at the highest price (yes, they get greedy…)

Never fool yourself into thinking your property is doing too well to sell or trade up because your cash flow is considerably higher than when you purchased the property or that the appreciation swing will never end. It always does and you as a real estate investor have to pay attention to it.

TIP #9

Selling rental real estate isn’t like selling houses you live in. You can paint any house and get a little more because it looks nicer.

Rental properties, especially larger ones, are different because they are bought by investors who look at income more than new paint or other cosmetic repairs. Look for ways to raise the income on these rental properties and you increase the value to investors which relates to more profit in your pocket at sale time.

There are several ways to increase the income on a rental property including raising rents, adding value to the tenants and facilitating repairs that lower energy costs.

TIP #10

When you are selecting a real estate agent to represent you, be sure that they are willing to provide you with a detailed blue print on how they intend things to go from start to finish.

You and your prospective agent should discuss how they plan to inform others that your property is on the market. Will they post an ad on the Internet, include it in a particular flyer or circular?

It is OK to ask them how much time they plan to devote to your particular situation.

If you are looking to sell your property in a hurry or if you are on a schedule, a part time real estate agent just will not do.

Always be sure that details regarding fees and commissions are disclosed prior to any type of agreement, especially any contractual agreement they ask you to sign.

Above all, do not be afraid to get into real estate investing. Thousands of every day people succeed admirably in this industry every year.

Gather the information you need, then get started making money.

Steve Majors - The Lazy InvestorProfit from Real Estate Investment articles, real estate investing information and DEALS from one of the most creative investors on the planet ~FREE real estate training course~ http://TheLazyInvestor.com

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