Billionaire Reveals Rules for Investing in Real Estate!!
Itâ€™s not possible to list any specific, universally applicable rules to guide the real estate investor. There are far too many different types of real property â€“ ranging from single lots in uninhabited areas to entire complexes of residential, industrial or commercial buildings. The rules investors follow â€“ or should follow â€“ vary widely according to the type of property involved, the use which is to be made of it and local and even individual considerations. Nonetheless, there are some general rules and pointers which provide a valuable checklist of things to do â€“ and not to do â€“ for anyone who is thinking of making an investment in any kind of real estate.
1 ) Make a thorough study of the real estate market and it prospects in your area before you buy. Naturally, you should seek to buy when prices are low and the indications are that values will rise. Always take into consideration such factors as the rate of population increase and the general prospects of business in the area. There is no quicker way to lose money in real estate than by investing it in property located in declining areas.
2 ) Know or learn as much as possible about every aspect of the particular use to which you intend putting the property you wish to buy. In other words, donâ€™t buy a house unless youâ€™re certain that itâ€™s suited to the requirement s of your family and that itâ€™s well built. Donâ€™t plan on having a house built unless you know something about building – or at the very least until youâ€™ve found an architect and a building contractor in whom you have complete confidence.
3 ) Deal only through licensed and reputable real estate brokers. Beware the fast-talking, high pressure real estate salesman who promises everything â€“ verbally. He is probably a fly-by-night who doesnâ€™t much care what he sells you or anyone else.
4 ) If you buy a property with a view to improving it, or building on it, be certain that you have adequate capital or are able to obtain adequate financing to complete the project.
5 ) If at all possible, always obtain at least one impartial, third-party appraisal of any property before you buy it.
6 ) If buying a building of any kind â€“ be it a Cape Cod cottage, 1000-room hotel or Willow Run-size factory â€“ have it inspected carefully by qualified and disinterested architects or builders before entering into any building commitments. If buying an existing income property such as an apartment house, have the ownerâ€™s books checked by a disinterested accountant. If the owner of the building or income property balks at such inspections, look out.
7 ) Whether youâ€™re in the market for a cabin site or a skyscraper, shop around widely and cautiously. Unless you happen to run across an irresistible bargain, you must snap up immediately, take your time about making up your mind. Donâ€™t allow yourself to be stampeded into paying any deposits or binders until youâ€™re absolutely certain youâ€™ve found the property you want. Remember that the purchase of real property usually involves heavy capital investment; donâ€™t take unnecessary chances with your money.
8 ) Make certain you have the best available legal advice before signing any agreements, contracts or other documents. I don not mean to suggest that there is anything dishonest or misleading in the majority of such documents. On the other hand. few laymen are able to follow the labyrinthine mazes of legal terminology which are used in them. To avoid misunderstandings, it is always best to have an attorney transate the â€œwhereasâ€-studded fine-print clauses into coherent everyday English. Even seasoned real estate investors sometimes fail to have this done â€“ and the ensuing squabbles between buyers and sellers, usually wind up in courtrooms.
9 ) Always insure the title to any property you buy. Even the most meticulous title search may fail to turn up all the pertinent facts about the history of a property. The cost of title insurance is negligible. The expense of fighting a lawsuit over a clouded title can be staggering 0 as many real estate investors, I among them, have discovered to their regret.
10 ) Once youâ€™ve bought your property, treat it as a long-term investment, not as a short-term speculation. Youâ€™ll find profits that way. Inf fact, if you wish to make money in real estate, always think in terms of investing and never in terms of speculating.
These ten pointers do not, by any means, comprise an all-inclusive guide to successful real estate investment. Nor does the individual who follows them â€“ however faithfully â€“ have any guarantee that he will make a profit when he invests his money in real property.
But, I believe that the person who observes these rules goes a long way toward eliminating a significant portion of the most common dangers inherent in any transaction involving real property. And that, in itself, is sufficient to give him a head start on the road to successful real estate investment. *
The above is excerpted from Gettyâ€™s book, How to Be Rich courtesy of Eric Johnson of Expanse Financial, Inc. and The Financial Independence Project, Inc.
If youâ€™re going to be financing the purchase of real estate, only do it after carefully analyzing your current resources, preferences & financial goals. If youâ€™re ready to engage in a make-sense financial transaction that serves these three areas optimally. Call me directly for a private discussion of your situation and intentions. Meetings by appointment only.
Eric Johnson, President
Expanse Financial, Inc.
The Financial Independence Project, Inc.