Wednesday, August 5, 2009

Making sure that all you ducks are in a row


I was reading the Wall Street Journal. There was a piece on Rookie Home buyers by June Fletcher. The article talked about a 1st time buyer that had saw the $8,000 tax credit and decided to buy a home in the Atlanta area. This person was a manufacturing engineer and actually did a quick walk through and decided to put a bid on it. He took a short vacation and the realtor informed him that the property was under a bidding war. Basically that means more than one person is bidding on it. So he upped his bid and won the condo, he got emotional on this condo. He won the condo and signed a 33 page contract and opened escrow. He got an inspection and found that the home had considerable more damage than he originally thought. The article talks about he had a problem getting out of his contract (probably a little overboard), you do have an inspection period that you can back out in.


Me and my team have all the processes in place that insure that this does not happen. We make sure that after escrow is opened we know exactly what we have to do. Through inspections and contractors all the bases are covered. You really need to do your homework when you start buying a home for yourself and investing. Check out the realtor and or person your using to find you a home. They should have a resume and some people you can call to verify that they know what their doing. Take your time and never do anything in haste. Making sure that all your bases are covered before getting into the real estate game!

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Brett young
Valley Realty
Owner/ CEO Roof Top Investment
Real Estate Investment
http://www.wealthbuildingequity.com/

Monday, August 3, 2009

Making mistakes in real estate investing


I found that the key mistake I see and have made is being emotional about your decision making on a transaction. I talked to a potential client last week and he had done just that. He had bought a condo in Tempe close to ASU (that's a great location). Where I think he made a bad decision is that he bought this while out of state. He thought he'd purchased a condo from a trustee auction. What had actually happened he'd purchased a wholesale condo for $65,000 and the fix up (for flipping it) was $3,000. The $3,000 would be a flag to me, if your flipping then you need to make sure that you have a pristine remodel. The realtor that sold it did not disclose that her client or her had purchased the condo for $42,000. Another huge flag, for just a $3,000 remodeled they could have sold it for supposedly higher than $65,000. The condo had another big problem was that the unit was a 1 bedroom and 1 bath. That shrinks your market considerably, basically 1 or 2 people can live there that's it. You also have a lot of apartments your competing with in that area. He had voiced concern on the rehad and said he didn't think it was up to par. Understanding how to do these transactions is very important to your wallet. What he should have done is get comps first. Look at the value and days on market. He should have detailed the rehab and make sure that everything that needed to be done was getting done. I would have also liked some kind of time line on the rehabbing. Then I would have checked the people telling me to buy and make sure that they done this successfully before. When you hire a coach you want to check out their resume before you hire them. I sincerely hope this gentleman makes money on this transaction, but doing your homework before hand and having the right team around you is crucial.

--
Brett young
Valley Realty
Owner/ CEO Roof Top Investment
Real Estate Investment
http://www.rooftopprofitmax.com/

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