This books provides many tips about all the aspects of becoming a real estate investors.
This is not complicated however it takes a lot of time and skills, once you acquired the knowledge, it can become easy and require less time.
Below are some ideas I found interesting in the book and worth nothing down.
It is better to buy a house than an apartment, tenants stay longer and tends to be cheaper. Houses have lower vacancies than apartments.
You want to rent to tenants that are not good at bargaining or have lawyers: avoid companies and commercial buildings.
Don't buy from another investor, he may be a better negotiator than you.
Don't sell to an investor, sell to someone who likes the house, he'll pay more
Diversify, Invest in cheap houses and more expensive houses.
Public records are online, compare neighboorhoods of houses you like
Buy in a town which grows in population
your first investments should be starter houses 1000-1200 sq.ft, 1-2 small bedrooms, no goodies... easy to rent
nicer houses gets nicer tenants, who take better care of the house.
more expensive house tends to bring less cash flow, but better capital gain (less taxed).
Long term tenants have a lots of furnitures, they like 3 BRs houses the best.
Avoid houses with pools, jacuzzi, fancy backyards, corner houses...
Don't let a seller simply refuse an offer, ask him what he is ready to accept.
Don't let a seller "shop" your offer == use it to show it to another buyer.
=> make the offer valid only for a short period of time (today only!, don't let them time to find a higher offer)
before making the offer, ask the seller is he is ready to sell the house today.
=> Justify this because of course there is another house you are interested in and you can't offer to buy both. This one is your favorite
house, thus your first offer.
While negotiating the price, never tell a price first. Offer what you want to pay (at least 15% lower).
if the seller comes with a counter offer several thousands $$$ lower => he wants to sell.. make a small increase on your original offer and
keep going.
if the seller comes with a counter offer very close to his original... he is not ready to sell yet
Realtor usually represents the seller's interests.
Negotiate the least important first (repairs, keeping washing machines, fridge....) and lose.... then invoke fairness when negotiating the
price.... plus the seller will be happy to have won before, and would have been thinking about selling to you for a while already (after
having negotiated a lot of small points)
Be careful of sellers that try to be your ally, and 'help' you do an offer that 'his manager' will accept. He pretends to fight for you!
Car sales do that systematically, when they know very well, since the beginning, what the minimum sales price is. They are professionnals.
turn them around, have them bid against themselves, call another salesman from a dealership of the same brand, and ask him if he can beat
this price.
then tell the seller in front of you that you like his dealership better and if he could do better, you'd go with him.
Short term lease option contract (some kind of owner financing, but safer for buyer who do not qualify for loan)
Good option to sell the house for more.
The buyer pays a small down payment, then pays a rent, till he qualifies for a bank loan and pays off. Give them advise on how to improve
their finance or credit score so they can get a bank loan soon. If the buyer doesnt qualify for a bank loan within the timeframe in the
contract (1, 2 years). You get the house back, and keep the money.
It's better to offer the buyer to pay for a small options, low rent, but high buying price, he'll see less risk, and you get more chance to
sell your house for a good price. (advertise $5000 moves you in)
=> since the house price is fixed, you take the risk that the house value increases during the contract, so shorter is better (you can do
1-year extension with higher house price and rent price, at least +5%, if the market doesn't raise so fast you can lower it)
A monthly amount goes towards a credit that the buyer will receive if he buys the house within the contract period
=> use $100/month, a low amount avoids that the buyer buils equity, then don't buy the house but claims or feel entitled to shared-
ownership.
=> about 50% of these sales close, for those that don't close, make the buyer a good tenant, extend the contract, don't force him out, give
him half of hist deposit back to move out without doing problems.
Investors want to buy in a live-in home-owner neighboorhood, easier to resell for more expensive.
Avoid areas where all owners are investors.
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