| Real estate investing tips tend to be a bit vague, | | | | 4. Negotiate openly. Just ask a seller outright, |
| like "invest in the right location," or "make sure the | | | | "What do you want to get out of this?" It is rare |
| numbers work." Actually, tips like these are | | | | that someone is offended by this simple question, |
| important principles to remember. However, since | | | | and it saves you from wasting valuable time |
| they have been well represented in other articles, | | | | talking about things that don't interest him or her. |
| I want to share a few more specific tips with | | | | Once you get a clear answer, you can decide if |
| you. | | | | you can give them what they want, and still get |
| 1. Listen to the market. The cabinet guy looked to | | | | what you need. |
| me for a decision. I realized that I knew nothing | | | | 5. Invest safely. Investing isn't gambling. There is |
| at all about which cabinets people like, so I asked | | | | always risk, but the difference is that the odds |
| him which ones others were choosing, and he | | | | are in your favor. If not, you are gambling. This |
| pointed to one that three quarters of his last | | | | why you shouldn't invest based on continued price |
| forty customers had chosen. That's the one I | | | | increases. There is no guarantee that prices will |
| want, I told him. Why argue with the market you | | | | continue up at any particular rate. Do deals that |
| are trying to sell to? | | | | work even if prices go nowhere, and if values go |
| 2. Do your own research. The real estate agent | | | | up, you're that much better off. |
| might show you only the comparable sales that | | | | 6. Run the numbers. It is about the numbers, and |
| make the property look more valuable. Do your | | | | if it is income property, it's about one number in |
| own research. Some counties have made it easy | | | | particular: cash flow. Whatever the local formulas |
| now, with sales prices online. You can also search | | | | are, whether gross rent multipliers or capitalization |
| any number of sites with MLS listings, just to get | | | | rates or whatever, just be sure that after every |
| an idea about the asking prices of other nearby | | | | last expense you'll have cash flow from the very |
| properties. | | | | first month. |
| 3. Partner carefully. When you do a deal with | | | | Rules, formulas and real estate tips are really just |
| partners, be the money or the management, but | | | | guidelines. Even the rule above about cash flow |
| not both. Group decisions tend not to work well in | | | | can be broken if you know that rents can be |
| real estate, and will cause you much stress. Once | | | | raised soon, for example. You have to use |
| you decide on and agree to a plan, step back if | | | | common sense and learn from experience, and |
| you are investing the capital, and let your partner | | | | you can't replace good analysis with rules, |
| do his thing. Of course, step up and take control if | | | | formulas and real estate tips. |
| you are managing the project. | | | | |