It seems that every time you turn on the television there is some real estate guru overly excited about what a great deal they made on this property or that one. They talk about the millions you can make investing in bankruptcies. This may be true but many of these so called real estate experts have made most of their money selling systems to people about investing in bankruptcies. Very few have made the millions they claim with real estate deals. There are so many little things which can make investing in bankruptcies a high risk business. Although the money can be made there are certain steps you must first take to realize a good profit.
The first thing you must do is develop a marketing plan. Every successful business owner has a marketing strategy. Without this plan of action there is no direction. The same is true when investing in bankruptcies. You must know what you are going to do and how you are going to accomplish your goals. It is a matter of simple planning.
One of the priorities is determining what you are going to do with the homes you want to buy. You can buy them and resell them, called flipping, or you can use them as rentals. You may even want to sell the homes on land contract to low income people. The choice is yours, but it is a choice you should make before even trying to buy your first property.
When you decide what you are going to do with the properties you are purchasing, determine who your buyers are going to be. This allows you to target the market. You will know to only look at single story homes with a low square footage if you are singling out the senior citizens in your area. If you want to deal with large families then the three and four bedroom homes are the ones you will want to look at for investment purposes.
Developing your strategy and niche will help you avoid costly mistakes you may otherwise make when investing in bankruptcies. You will not be tempted by properties which do not fall into your marketing plan. The marketing plan you create will guide you each step of the way when investing in bankruptcies.
Any property you can purchase at below market value can become an income producer for you as an investor. By investing in bankruptcies you are gaining an edge in the real estate market. Since most of these properties are being offered at below market value you are already starting with equity in the home. Sometimes there is as much as 30% of the market value left untapped. Many people feel this is a great yield on an investment. Others feel this is too low. However, to put this in perspective, if you were to buy a $100,000 home for $67,000 and sold it for $100,000 you would profit $33,000 before expenses. Doing this two or three times a year can actually give you a nice income.
There are times when it is best to hold onto the property until a slow market begins moving again. This may even increase your profits. This is risky for any investor, especially one who is new to the real estate market. Taxes and insurance are still due and so are the mortgage payments. Calculating the risk must include these financial obligations. Either way there is money to be made when investing in bankruptcies.
Sarah Miller, a well known and reputable remax realtor college station is a good source of information on remax properties college station that you can invest in.
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