With the real estate market on the rise, often people wonder is now a good time to invest in real estate?
This is some tips to help you with your investment strategy.
First, be sure to base your purchase price on it’s current, as-is state.
Often, especially new investors, will look at what the property could be worth with a lot of repairs, or by waiting on the market for a year or two.
This is a critical mistake.
And getting the estimates from Hillsborough County Appraiser’s office is not going to cut it either.
You’ve got to know the market.
Analyze all the properties within close proximity of the current property your looking at that has similarities of what’s currently on the market.
Secondly, don’t just look at what’s for sale.
Instead, dive into what’s already sold.
Pay close attention to the amount of time the home was listed for sale, how many days on the market, how many reductions the buyer made.
This is critical or else you could get caught upside down in a property where you owe more than it’s worth.
All too often, people will get online and just do a search.
For example, let’s say you’re looking for investment property in Tampa, then often people will just look at eBay and Zillow to see what’s listed.
Instead, know what the market feels like, know the streets, know what the eyesores are.
Third, buy as if you had to turn a profit today.
As I mentioned, all too often, investors will only focus on the potential of the property appreciating.
This is nonsense.
Imagine, you had to flip the house for a profit right away.
If you can’t do that based on the numbers you’re looking at buying the property for, then you’re already in too high.
Fourth, don’t break the bank.
You should never exhaust all of your savings or beg family members to go into the deal with you.
There’s currently plenty of private investors will do hard money loans with 100% financing, simply based on what the numbers of the deal look like.
If you’re unable to get the funding for the deal, then maybe you need to re-evaluate the numbers a bit.
Once you have concrete numbers, know what the home is actually worth in today’s value (not future value) then and only then should you invest and have a clear-cut idea of what your profit potential is.