TIP #1

Often rehabbing a home takes longer than anticipated, or the cost of materials and labor rise unexpectedly, local ordinances change, or other scenarios come into play to make a project run longer than scheduled or over budget - or both.

A simple plan for calculating rehab cost and time is this:

Estimated rehab cost x 2 = Actual rehab cost

Estimated rehab time x 2 = Actual rehab cost

Estimated rehab profit / 2 = Actual rehab profit

If you follow this simple formula, you will always have a more pleasant rehab experience!

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 investing transaction.

Not taking the time to learn proper real estate investing 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

In every real estate investing deal A LOT of money is changing hands, so you'll need professional contracts that keep you out of trouble and keep your customers happy. There are standardized contracts you can use that cover all the bases.

You also need to organize and structure your business like any other, and there are very smart ways to do that, while maximizing your profits and minimizing risk using proper asset protection and entity structuring methods.

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 smart lenders by your side.

TIP #5

All too often real estate investors feel that "A better deal may be just around the corner" and never starts his or her real estate investment program because they always hope a better deal may be out there somewhere if they just wait...and wait...and wait.

Real estate investing deals do not come knocking on your door and there will always be another one out there! You can only take advantage of one at a time anyway, and the good ones will come to you more often as you have more practice.

Take action and get out there!

TIP #6

When you buy the debt that finances real estate, you participate without having to roll up your sleeves and deal with the nitty-gritty details of rehab work as well as avoid the hassles of dealing with renters and all the other less-than-desirable aspects of real estate investing.

Those who invest in the loans that fuel projects will always be in demand, as long as there is a market for buying and selling property. And, that is likely to be around for a long time!

Become the bank - that is where the money is!

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

To earn maximum profits from your real estate investing you simply find owners who are highly motivated to sell (due to a change in their situation like divorce, death or job conditions), buy their property (preferably with other people's money), then sell at a higher price and keep the change. Often that change is $10,000, $20,000, $30,000...and more!

TIP #9

Many real estate investors continually try to purchase investment properties that are not really on the market. What I mean by that is the property owners have the attitude of "Sure, my property is for sale... for a price". Unfortunately, 'for a price' usually means it will make no financial sense for an investor.

Be sure to analyze the real estate investment for its true value and work only with truly motivated sellers that are willing to work within parameters that allow you to make a profit for the time, money and effort you put into it.

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.

Additional real estate investing help. The trick in real estate investing is to satisfy the seller's needs and win the seller's trust. Then put together a deal that works for both parties. Write it up, sign it and reap the profits! You need not be a millionaire to do real estate investing, you simply need to be focused on a win-win scenario.

Steve Majors - The Lazy Investor
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