Today I am hearing all too often is, so many investors are telling me that the reason they aren’t making many offers to buy houses, is because they feel current market conditions are just too risky for them not knowing what direction the market is going.
Believe me I understand why those inexperienced investors are having little or no success as a real estate investor.
I get why they aren’t actually making very many offers to buy property, if they are making any at all. I remember those days when I was afraid to make offers. I was broke and if I got an offer accepted, I had no way to close the deal. I had no money and I had lousy credit.
I would set up half the night praying the sellers would accept my offer. This was because, if they did except my offer, I had no way to close the deal. It took me years to overcome this fear.
Listening to this podcast will show you why it won’t take you years to overcome your fears of making offers. Learn what to say and what to do to eliminate your fears of market conditions you think are too risky to buy real estate today.
I am constantly talking to all too many investors who are worried about what the real estate market is going to do in the near future. Any savvy real estate investor should know that market conditions only affect a certain part of real estate investing business, but not all areas. I talk to inexperienced investors almost every day who believe the real estate market is going to slow down and prices are also going to also go down. This may be true in some areas.
Having personally lived through several economic cycles over my 40+ years in the real estate investing business I have experienced several market changes where some markets went up in price, and some markets the prices went down. Today’s podcast is about how to read the real estate market and every economic cycle to be sure you make money in any economic cycle. How some parts of real estate investing are affected, and why other parts are not affected by market conditions and economic cycles.
When the real estate market prices go up and up, you can make money retailing properties, but you need to be aware, when house prices continually go up, fewer people can qualify to buy a house to live in. When this happens those people, who are unable to buy usually become renters.
When the market prices go down the intelligent investor knows that if they plan to sell the properties they buy at a retail price, may not work as well as planned to make as much money as the investor thought they were going to make when they bought the property.
If you want to magnify your real estate profits you must start thinking like a seller instead of a buyer. There are a number of reasons why a person may want to sell their home and for each reason you have to customize the way you structure your offer if you want them to sell to you.
If you’re only thinking about creating a deal that’s good for you, you’re going to have a very short career in real estate investing.
Take the idea that sellers always want cash for their property. That’s not the whole truth, sellers don’t really want the cash, the want what the cash will do for them. If you dig into the desires, hopes, and dreams of the seller and offer them a way to get those things you are much more likely to win that deal.
There is one important principle you have to keep in mind when it comes to real estate. If you do what everyone else does, you’re going to get what everyone else gets. You have to get creative with your offers and consider what the seller needs from the situation.
Asking them “what are you willing to accept other than cash?” is a great way to start the conversation and figure out what the seller is looking for so that you can structure an offer that gets them what they need.
If you understand the four parts of making an offer; the purchase price, the interest rate, the length of the payback period, and the payment amount, you can always create an offer that will get the seller what they want.
Ask questions, find out why they’re selling and what they really want, and you will be able to do more deals than you thought possible simply because you are thinking like a seller.
When it comes to buying properties, there are a number of things you have to think about in order to make the best decision for your business.
Knowing the highest and best use of a property is probably one of the most important factors that will go into your decision making process on whether to buy a property or not. Is it the kind of property that you buy and wholesale the deal to someone else? Is it one that you’re going to make beautiful and sell retail? Are you going to hold it long term and keep it as an income property?
Once you figure that out, you also have to assess the desirability of the property as well. Is it a property that even after fixing it up it will never be a family friendly property because of the neighborhood it’s in?
The highest and best use of the property is what will determine the kinds of repairs and renovations you’re going to want to do, if any. If you get this part wrong and don’t calculate your costs accurately it could mean losing money instead of making a profit.
For properties you intend on holding on to, one of the best tips I can give you is to spend some time looking at higher value houses to see what kinds of amenities and materials they use so you can incorporate them into your property. Being cheap on the repairs can cost you later on in the price you can charge.
If you plan on doing some sort of rehab on your property in the future, my Tricks of the Trade course will give you the tools you need to make sure you don’t get ripped off.
Get your free phone script on how to negotiate with sellers over the phone by going to larryharbolt.com/register