Today’s real estate market can present some unique and trying challenges. Financing for one, especially for investors is extremely tight. Real estate and the economy are experiencing the largest downturn since the Great Depression. Here are 5 tips for today’s market.
1. Pick an appropriate strategy and area then become a master – Instead of spreading yourself to thin on every strategy out there, why not pick a strategy that makes sense, target an area, improve upon your strategy and become a master? Create a successful track record and you can duplicate over and over.
2. Make sure you have multiple solid exit strategies – It is vital to have strong equity and strong cash flow which will result in multiple exit strategies. In most markets, longer term strategies are more appropriate. While flips are possible, it is important the property will cash flow in case the property does not sell for the amount expected. That way you can rent, lease option, sell to an investor, carry financing for a buyer, sell the note, etc.
3. Have flexible and multiple financing options – Most investors have the challenge of obtaining financing in today’s market. Raising private money, having cash reserves, credit, lines of credit, hard money lenders and ability to finance conventionally will make things a lot easier. There is a ton of opportunity out there for those who can finance deals.
4. Build your buyer’s list – Wholesaling property is a very attractive strategy for most beginners. It is crucial to have a buyer’s list and continually grow that list. The investors with the buyers will have the best chance and doing the deals.
5. Don’t take unneeded risks – There is absolutely no excuse for paying more than a property is worth to you. Stick to your criteria and do not settle. You should be cherry picking from only the best deals.