The best real estate decision you'll ever make, may in fact be the deal you never do. Its ten times better to do one truly great deal then ten marginal ones. That is because it can be the one marginal deal that could possibly turn into a financial nightmare for you.
The furthest thing I would ever want to promote is to try and take the wind out of anyone's sail. Make no doubt that real estate is the quickest way for those of us who are an “average Joe” to make true wealth in this life. Well, that is if one's risks are minimized and that is really all I'm trying to stress.
Think about your real estate business in terms of this:
1) What is the worst-case scenario that can happen to me financially if I do this deal?
2) What is the worst-case scenario that can happen to me legally if I do this deal?
If you're prepared financially and legally for the very worst that can happen, then take the risk and do the deal if there is significant financial benefit. In “risk” it can be as little as your investment in postage to start a direct mail campaign, but it can also be as large as downturn in market rents on a 36-unit that already has significant vacancies.
So how can you minimize your risk being prepared for any worst-case scenarios in real estate. You can first off become like an ostrich by sticking your head in the ground and never do a deal. The realistic approach is to make prudent decisions in when you BUY and/or CONTROL the buying process of real estate. You make true wealth in real estate upon securing truly astounding purchase price and/or terms. Your profit is simply realized when you resell for a profit, rent out for monthly cashflow, etc..
So what is the key that is going to make sure you are never go to make an unprofitable decision in buying and selling real estate? Well, probably nothing and even the most seasoned real estate investor will admit to at times trying to make a deal work that looked profitable but realistically became emotional about the initial buying opportunity rather than factual.
The true fact of the matter is that you can help yourself tremendously by securing the best quality deal in your initial negotiation process. Which, when you boil all this down into one aspect that means you're negotiating with truly motivated sellers. If you want to fit that no-money down lease option technique with the seller wanting all-cash and retail value then it can be a recipe for a burden if you try and force the deal to happen. Trying to be profitable in that type of situation is like putting a square peg in a round hole…it just doesn't work!
This means that your very best opportunity for immediate and sustained success in real estate lies with the strength of your deal. That is why the path of least resistance is with truly, and I mean truly motivated sellers. Having an actual bona-fide marketing plan that is cost-effective and cost-measurable producing multiple opportunities with sellers who have a large degree of flexibility on their price, terms or both will produce wealth for you in buying and selling houses.
Continue to increase in your knowledge of many supporting and critical aspects of your real estate business such as asset protection and tax reduction.
But without truly great deals to begin with there will be no assets to protect or taxes to calculate! Put a large emphasis on having a marketing plan that will consistently put you in front of truly motivated sellers.