As a new investor, we all had a fear of the unknown. We all want to be successful at real estate investing but just need to know where to start or how to do a deal. Right? I been there too. So here is some basic real estate investing information that walks you through a deal in 7 steps. These tools are all great for evaluating leads and help through your first few real estate deals.
7 Essential Deal Evaluation Steps
Step 1) Location:
The location of the property will usually determine what techniques you can use. Generally, Ugly Houses = Wholesale or Retail. Nice Houses = Options, Lease-Purchase, or Owner-Financing. Here's what to look for:
- Ugly homes in need of repair.
- Properties in appreciating areas.
- Properties that have easy terms.
- Properties with seller financing.
- Properties located in high rental markets.
Step 2) Real Estate Bargains:
No matter what technique you use, you want to find good bargains. The better the bargain, the more you profit. Real estate bargains are usually the result of highly motivated sellers.
Step 3) Motivated Sellers:
Motivated sellers are sellers that are in situations they need help with. Usually their property is the problem. Motivated sellers make good real estate deals for us. Be sure to write down all real estate investing information about the home.
Step 4) Gathering Information:
Gathering information will help you stay organized and give you the best possible analysis of a property. Be sure you have a Property Research Form, Property Inspection Sheet, and an All Cash Offer worksheet. Other information you will need is Repair values, qualifying the seller, and financing. Use all necessary information that can help you with your buying decisions. You will profit when you buy and realize it when you sell.
Step 5) Contracts:
Your contracts must be bullet proof. You should always consult your real estate attorney before using them. There are several factors to consider when using contracts. It is wise to work with a real estate agent or you local Real Estate commission to obtain widely used and accepted forms.
Step 6) Use other people's money (OPM):
Whenever you can use someone else's money, you have tremendous leverage. The seller will still receive what you have agreed upon. Here are some ways to use other people's money:
- Other Investors
- Subordination Technique
- Substitution Of Collateral Technique
Step 7) Closing:
As the buyer, you can choose a Title Company to close your real estate transaction. A Title Company researches the title for any defects. They will then close your deal and give you title insurance.
There's a lot of real estate investing information out there but follow these 7 basics steps to get you started in real estate.