The buyers from today’s housing market can be described as more choosy and picky when they choose a property. This means that selling a house in today’s property is done with more caution and with a more detailed outlook.

Three factors determine what makes a good house to live in. Buyer usually take these into consideration when choosing a house that they would like to buy and live in.

Location: Location is the first thing that the buyers think of. They decide on an area of the town that would be most ideal for them to live in and start from there. If the property you’re selling is in this kind of area, chances are you’ll have many prospects to sell the house to.

Price: Price is always an issue in any market. Buyers always look for properties that are accessible and ideal while at the same time affordable for their pockets. Considering the price is especially essential today because of the recession and the ups and downs of the housing market.

Presentation: This automatically includes repair and staging the house. Buyers won’t just choose a property over location and price. Buyers today are picky; they will choose a house that they see and feel is right for them. With this in mind, you have to present the house you’re selling in a simple yet affecting manner. You have to present the house in a way that the buyers will be able to see its fine points and potential.

In real estate investing, it’s not unusual to have a property rehabbed. Fixing or remodeling a house has become a usual process in buying and selling properties, that every real estate investor always considers it in their system of real estate investing.

Rehabbing can be defined as the connecting thread between an investor’s buying strategies and his or her exit strategies. Rehabbing is commonly mistaken as an exit strategy, but this is not so. Rehabbing is more like shaping the deal for an exit strategy.

There are two types of rehab:

• Fixing
• Remodeling

In fixing a house, you would ideally only spend around $10,000 or less. If it exceeds that amount, it would be wise to remodel the house instead. Be efficient on your expenditures for rehab.

Poor or No System for Rehabbers

The one major problem of rehabbers is that there is not really a system to rehabbing. It is unlike real estate investing wherein there are numerous systems that you can apply to get a deal. In rehabbing, there are a lot of factors to consider that creating a unique system is difficult.

Why is it difficult?

One thing that makes it difficult for rehabbers to have a system in fixing or remodeling the house is because you have to base mostly on estimates when making an offer to the seller. There are times when there is a wide gap between real numbers and estimations.

It is also hard to remember details on specific properties. Rehabbers have to take note of every detail if they’re going for the right price.

These uncertainties increases the odds of missing important information, and it could cost you thousands of dollars. There’s a chance that you could lose a contract or make a poor deal because of bad estimates.

The General System

The general system in inspecting a house for a rehab sounds easy, actually. But in reality, it will take a practiced eye for details and a lot of effort. There is a need for diligence and double-checking.

Start with the outside first. Go around the house twice; the first round looking straight and up, the next round looking straight and down. Afterwards, do the same when checking the inside. Inspect every room twice, positioning yourself at the center. In inspecting both the outside and the inside, take note of what’s good, what’s in bad condition, and what’s missing.

In checking the inside of the house, the rooms that you have to inspect first are the following:

·        Kitchen

·        Bathrooms

·        Closets

·        Curb appeal

It’s also good to put in some add-ons to the house, and add value to the property. Check to see if you can add or change doors, windows, porch rails, and others.

In order not to forget some details, you can take pictures and make sketches of the parts of the house, too! This way, you also get to visualize how you want the house to be in the end. 

Work Your Rehab System!

While it is difficult to make your own rehab system, it is nonetheless possible to make one. It is important to work together with contractors, repairmen, and the rest of your rehab team.

Learn what you can from them. Consult with them over the estimates, the costs, and how to be efficient with both money and time. Construct time-tables and prepare price lists beforehand if you have to.

Just remember to be in control with time and money. Rehabbing will take a lot of both. Spend only enough. Spending more money is not good, of course, and spending more time will incur more expenses. Control and efficiency is definitely needed in rehabbing. 

Most of the real estate properties you’ll encounter as a beginner or experienced real estate investor will need a lot of fixing, inspection, and costs. Finding a good property wherein the expenses won’t eat you up is challenging, and you have to make certain that you buy properties that you will be able to sell.

There are four main exit strategies in real estate investing:

• Wholesale, which will give you an active income
• Retail, which will also give you an active income
• Rental, which will give you a passive income
• Private Lending, which gives you portfolio income

Other techniques in flipping or keeping the property are just that — techniques. These four are the main exit strategies that real estate investors should focus on.

In applying these exit strategies, you first have to take a look at the property you’re buying. In real estate investing, you make money when you buy a property, not when you sell.

7 Steps In Buying a Property

1. You have to first tell the world that you by houses. So start by marketing yourself as a buyer.

In marketing yourself, you will be able to get more resources in looking for leads. Do not do so much advertising on ads and newspapers. They can help but not as much as getting leads from referrals and drive-bys. Most leads are generated from contacts and networks you have. Marketing yourself as a buyer will set you in this pace.

Concentrate on getting a pool of referrals. Make a marketing business card and also prepare a professional business card as you go along marketing yourself.

2. Develop two important skills in looking for good deals:

·        Identifying distress properties

·        Identifying distress sellers

You don’t just choose any property that you lay your eyes on. You have to pick them wisely. Remember, you make money when you buy, not when you sell.

In identifying which homes to pick and get fixed, inspect them diligently and wholly. Check if you should either fix the home or have it remodeled.

In looking for the owners of the properties or houses, there are five ways to go about it:

a.)   talk to the neighbors

b.)  check tax records

c.)   check for deed records at county clerk’s office

d.)  address correction request

e.)  check the utility companies

In checking for the owners, you will recognize distress sellers when they’re going through a divorce, job loss, failed business, or anything that has rendered them unable to make payments.

3. Find motivated sellers.

Making a deal with motivated sellers makes real estate investing easy for you. In finding motivated sellers, all you really need to do is ask the seller why he or she is selling the property.

4. Do the inspection.

When doing the inspection, check every corner and every side of the house. Check first if the property is really fit to be in the neighborhood or if it’s in the right place. Then check to see if the house needs to be fixed or remodeled.

Above all, see to it that you can take care of the expenses and that you’re sure you can sell the house.

5. Present your offer quickly.

In the real estate business, it is wisest to offer your deals fast, usually within twenty-four hours. Successful real estate investors would always say to make the deal and sell the property quickly. The same goes with presenting your offer to the seller.

6. Negotiate and Escrow.

Negotiations and completing the deal are inevitable, of course. Learn to say it right and how to do it right. Get to know the seller, his reasons for selling the property, and help him attain his goal of selling it that will benefit the two of you.

7. Check the title.

Always check the documents of the property. Check the title and deed of the property. Make sure it’s clear who the owner of the property is.

After months of working as a realtor of abandoned properties, you’ll realize that driving down streets and looking around just won’t cut it. You will find that you will only be wasting your time, money, and energy looking for abandoned properties when you can do so much more with less!

So maybe you made an ad, put up some fliers, and set up some posters. But think it over again. What else could you do with the same amount of money? What if there was another way wherein you could have used your budget better and wisely? Would you have still gone for newspaper ads and posters?

Maybe you won’t, because there is one way where you can hit not one, not two, but three birds with one stone! Not only will you be able to advertise your business, you’ll also be able to find customers and abandoned properties. Plus, you won’t have to put in much effort looking for abandoned properties on your own!

How’s that? How do you do that?

Let’s say you’ve set aside $200 for your advertising costs. You could have an ad and some posters made with these. But the disadvantage of this strategy is that you may not be able to reach your target market. Not everyone is interested in reading about real estate, especially not about abandoned properties. What’s more is that your target market is not the only market you have to reach to garner customers! A passer-by can just point you to an abandoned property he or she knows of, and he’s not even part of your market.

Another disadvantage of this strategy after you’ve spent your $200, there’ll be nothing more you can do to get more clients. What happens when that ad or poster is gone? You’ll have to make new ones, and that’ll be another hole in your pocket.

Now try this.

First, make some forms wherein you can generate information about an abandoned property. Make sure you get the name of the person who refers you to that property, the location of the property, and other information.

Then get your friends, neighbors, and relatives. Ask them for a little favor. All they have to do is give the forms to their acquaintances and see if they know of any abandoned property around the city.

Here’s the catch for them: For every lead about an abandoned property, the person gets $10.

Not only will that give some motivation for people to look for abandoned homes for you, you’ll have many of them help you look for abandoned properties at the same time! This will certainly help you with your time, your gas, and effort. It also optimizes what you can do with $200.

Do the math: With $200, you’ll be able to get 20 leads. Surely, these leads will give you many sales and big profits, and when the profits are in, your $200 will be just a small thing. You don’t have to scratch your head thinking over a catchy title for an ad or flyer. All you have to do is generate information by giving forms to people and offering incentives.

Another benefit of this strategy is that it still focuses on the one idea that’ll generate you more clients: You got abandoned properties coming at your way! While giving off forms and incentives, you’ve also spread the word that you’re investing in abandoned properties, properties that many owners no longer want to own!

In the end, everyone wins. You got to advertise, your leads get some cash for the information, the owner of the abandoned property is rid of the burden of having a property that will only cost him mortgage payments, the property gets sold… and you get a big profit!