Real Estate
posted on 10 MAY 2007 |
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Making Money in Real Estate:
Mistakes to Avoid
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When it comes to making money in real estate the highest profits can
be found in the art of flipping. Flipping real estate is the process
of buying a fixer home under value, doing the necessary work, and
reselling it for substantial profit. But while there are great
profits to be earned in flipping real estate, there is also a great
potential for loss.
The key to making money in real estate is to maximize profits and
minimize loss; both of which can be done by avoiding these mistakes
most commonly made by real estate investors:
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Buying over-priced properties – Making money in real estate requires
buying a home substantially under value so that you can resell it
for a much higher price. If you buy a home that is only marginally
under market value, you will have a hard time selling it for profit.
Remember; you must also budget repairs, legal fees, broker
commissions, taxes, operating costs, and leave room for unforeseen
expenses. As you can imagine, all of these can dramatically affect
your bottom line.
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Buying properties that need too much work (for your individual
experience) – While making money in real estate through property
flips always involves some amount of remodel or repair work, you can
purchase properties that are too far gone to make a profitable flip
feasible. Always have a good idea of how much the needed work is
going to cost before you purchase a home. |
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Not performing a title search – If you purchase property by
traditional means, a title search will be performed for you. But if
you buy foreclosed homes, it might be up to you to perform a title
search on your own. Never underestimate the need for a title search.
Keep in mind that you will inherit all legal issues and liens
associated with a property when you buy it.
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Sticking to schedule – Making money in real estate only happens when
you buy and sell a property quickly. If you hold onto a property for
too long, you will have to pay bank loans and interest charges. Make
sure that all of your construction stays on schedule to avoid these
costly charges.
Sometimes making money in real estate has less to do with the smart
choices you make and more to do with avoiding the costly mistakes
that can cut into your profits. Keeping your eyes open for potential
losses will ensure that you keep your hard-earned profit where it
belongs.
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About the Author: Chris Thomas is a real estate
investor and author of the best selling ebook "Dominate
Preforeclosures," which teaches you how to acquire property in
pre-foreclosure with a successful, proven way to approach homeowners
and get the deal. Learn the strategies that the top investors use
daily, but refuse to share by visiting
http://www.dominatepreforeclosures.com. |
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