The reason investing in real estate has become so popular is because you can get a better return on your investment than you can in just about any other investment. As your experience in real estate investing grows, your returns will get higher and higher because you know who to find the best deals, structure deals for good cash flow, and you have a plan for the future.
The great thing about investing in property is that there is a lot of it. Just because you don’t get a property that you wanted doesn’t mean you should give up. It is a guarantee that you will find something even better with a little more research.
Having and using a team
It is important to use your team wisely. Use your agent as much as possible. Your agent has lots of knowledge, so put that knowledge to good use. Let your real estate agent do your negotiating for you, that is part of their job. You don’t need all that hassle, let them earn their commission. Your agent can also help a great deal in finding the best investment property for you.
Basically, the real estate agent should be involved in just about every step in the investment property buying process. In time, as you both get used to how each other like to do business, you will become a well oiled machine, working deals faster and more efficiently, making both of you more and more money.
I think it is a good idea to have an agent, but you don’t have to use one. Some people want to do everything themselves, not only saving money but increasing their knowledge exponentially. Be prepared for some headaches though, and be aware that you will make some mistakes along the way. Everyone does.
The tough part for someone that wants to do everything themselves is that they will not have the access the real estate agents have. Sometimes the only places you can find potential real estate investments is through places like multiple listing services (MLS). Real estate agents are the only ones that have access to MLS listings. There is lots of great information in MLS listings, that you would not get otherwise.
Paying the agent
Real estate agents get paid on a commission basis. Oftentimes the percentages are negotiable. It can even be negotiated that the seller of the property pay your agents’ commission. Be respectful of how much you are paying your agent. Don’t throw your agent under the bus just so you can get an investment property. Take into consideration future business and profits that will be made. If you have a good relationship with your agent you will both be more profitable in the long run.
When you find a potential investment property. Get to know the owner if possible. You will be able to find out how creative you can get with the owner. If they are desperate to sell, you can do many things to get a deal worked out. Some owners are dead set on their price so your options will be limited. It does not hurt at all to become acquainted with the seller. Most of the time the best deals are the ones in which everyone feels like they got what they wanted.
In your conversations with the seller of the investment property you can find out everything you need to make a wise decision. You can find out how long they have had the property, is the owner an investor, why do they want out?, are there other offers?, are they willing to finance?, how firm is the price?, and are they willing to negotiate?. All of these things can help you structure a fair deal for both parties.
Sometimes it is better to deal with someone that has multiple properties, they don’t have an emotional attachment to their property and they are strictly concerned about the numbers. This makes your job easier.
