Making Money in Real Estate: Mistakes to Avoid
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:
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.
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.
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.
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.