What are your initial thoughts when you hear Real Estate Investing? Let me tell you, it is not as easy as you think. We have stressors just like any other business or employee. When you stop working for someone else and want to go into business for yourself, life can throw so many curve-balls at you. I know you’ve heard the saying, when you’re moving in the right direction, worldly things give you so much push back…or something like that. It’s true but you have to keep pushing forward! Anyway, welcome to the reality of a Real Estate Investor.
Finding the right property? Eh no problem!… NOT!
Whether we’re looking for a rental or a fix and flip it takes time and effort! You may drive around and see many distressed houses that need to be fixed up and think “why aren’t investors buying these?”.. Some owners are 1. Impossible to get a hold of… 2. Don’t want to sell… 3. They want too much money for the property.
Hey all of you who may be interested in getting into real estate, make sure you understand the business completely because there are a ton of new investors out there who don’t completely understand and they are losing money! When you are running through your numbers it’s not a simple this + that = this. Some seem to think that it’s just the purchase price + rehab amount = after repair value. We are seeing a lot of new investors who are offering tremendously high prices for properties and out bidding everyone, then losing money in the long run. Depending on your market, buying an investment property can be very competitive!
Contractor Bids / Budgets!
Finding a good contractor is a challenge in itself. There are a lot of things that play it’s part in finding a good contractor, you need to find someone you can trust, you work well with, you like their work, & they stay on budget! You may think, “No problem! I have friends that are contractors!”… Well we did too, but just because they are your friends doesn’t mean that you will work well together in the business world or that they do good work. How do you tell your friend that you don’t like the work they are doing without hurting feelings or causing conflict? So how do you minimize conflict with contractors? CLICK HERE!
Risk of Losing Money
As with any business, there is always going to be risk. When investing in real estate, it’s scary having a good chunk of money left in properties when no one can predict the future or what is going to happen with the market. The intent is to purchase property that is going to gain value over time, however we can’t predict market shifts and the rate that the value will increase. That’s why when you are doing a fix and flip it is very important that your contactors work quickly so you can sell quickly. Get 10 real estate investors in a room and see how many of them have lost money in a property… I bet 9/10 people will say that they have. Before you get into real estate, know the risk and if you are running low on money it may be a good idea to wait for a better time.
So now you see, it’s not as easy as you think. It’s a hard business to be in just like all other businesses, we all have our struggles and stressors. Now that you are here on our blog page, check out some of our other recent blogs for some tips and tricks when working in Real Estate.
Thanks for reading!
– Legacy Frontline Team