» Real Estate Investing Criteria-Stick to the Basics in any Market » Posted by Realestator      

Foreclosures, Short Sales, Distressed Homes - there’s so many ways to make money in real estate right now, one could easily forget about their Real Estate Investing Criteria. But a wise real estate investor will remember that in any market, you should always Stick to the Basics.

  1. Location, Location, Location: The holy grail of home buying is even more important in a depressed market. Look around and determine how many other homes in that area are also bank owned or short sales. This will severely depress the price for quite a while until things recover. If you plan on renting the house out for a while, then you may still end up with a good deal.
  2. When in Doubt, see Rule #1: Just because you can buy a home for $.60 on the dollar, remember to buy in a safe neighborhood with low crime and good amenities. Buying near an airport or freeway, or in a horrible area, will make your exit plan very tough!
  3. Condition: Homeowners who have not been able to pay their mortgage probably have not been able to perform upkeep on the house. Many houses will have a lot of deferred maintenance. Whenever possible perform your due diligence and bring in a home inspector or contractor. Paint, carpet and appliances is one thing. A new roof or subfloor is quite another and can make that great deal a nightmare.
  4. Comps & Rents: Just because you’re getting a steal on home, don’t forget to find out what you will be able to sell it or rent it out for, depending on your strategy. Try to use comps no older than 3 months. And look for areas where you can charge at least 1% of the purchase price in rents (unless you’re in an area with high property taxes, then that percentage will have to be higher). This will safeguard you from losing money when it’s all said and done.

By using the above Real Estate Investing Criteria, you can be sure to get a good price when you buy, and be able to easily sell when you’re ready to exit.

For more real estate investing information, visit the realestator’s website at www.real-estate-investing-support.com

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» Posted in Real Estate Analysis, Uncategorized on May 28, 2008.

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