property
Tycoon, you have to be disciplined to learn the basics. What
you are about to read, it may come as a surprise to you, but it is
the only mistake among real estate investors, especially new ones
investors that can literally cost you thousands of dollars and
it can even potentially put you out of business for good. Now me
I'm definitely not trying to scare you, I just want to get you going
aware of the number one potential pitfall when investing in real
estate because it is completely avoidable. And conversely
popular opinion, this is not something that can be read from
watching TV late at night or at a weekend seminar. One
a common mistake I've seen that turns investors off
business revolves entirely around doing their due diligence or
lack of due care.
Like you're just starting and sometimes even after you've finished
have completed several trades, your adrenaline will pump every time
you look at the deal. You're hungry, maybe a little
desperate for a deal. Your heart pumping from
the excitement of this offer and all you can think about is
purchase of this property. And as a result of your eagerness, you
they tend to slip up and make mistakes. The only critical error
which will cost you your business comes from simply overestimating
property. You analyze the store numbers a bit
exaggerating the value of real estate "as is" and it's true
potential. In other words, you estimate the value of the property
more than you can ever sell it for. Now, there it is
on top of all that, the good news: I can show you exactly how to behave
from this critical error. That's not information
this is optional; it is vital to your business that you get it
right.
So here are three bulletproof ways to evaluate properties
keep your property values in line:
Access value of the tax. For each property,
there is a parcel tax number which reveals the tax value
ownership. Owners pay tax each year on a current basis
the value of the property proved with the tax administrator. This
the information is freely available to the public in every market.
In some areas, tax assessors only access the property every three or
four years, so these values can deviate significantly
fair market value. You will have to find out when at the latest
an assessment has been made in your area. You can go to
region
recording authorities and tax assessors.
2. Comparable sales. This is exactly what licensed appraisers do
to be used in assessing the value of real estate. They look at
ownership; its current properties and status. Next they
goes to the MLS (this is the listing service most often
used by real estate professionals) to download all real estate sales
around the home usually within the last three to six months
within half a mile of the subject property. You can perform
the same exact exercise with the help of a realtor. Just call
real estate agent and ask them for listings and sold homes
compare to the house you are looking at. Now you want
get a list of homes sold and those that are on
market. After all, you'll want to know who your competition is
when you start offering the property for sale. Would you want
compare area, age, roof age and all others
features that are available. How much is your property worth?
market? Does it have more or less to offer for the money?
Also pay attention to how long the properties sit
market before they sell.
3. Drive around. Right, get off your ass, get out and
learn your current market. The fact is, it exists
there is no better way to find out your current market conditions than
see what the market has to offer. Currently,
there are plenty of websites you can subscribe to
they will give you comparable but simply know your market
walking from neighborhood to neighborhood is priceless. Buy a
cheap map with yellow highlighter. Now start in one area
your market runs the neighborhoods and you work your way up
until you look at every neighborhood in your market,
highlighting the areas you want to work on. When you drive
You'll want to note every home for sale in these neighborhoods
and collect every flyer that advertises a house for sale.
Next, make a few observations about each house. Look at
structures, on the roof lines, whether the houses are in order
face. For each property, guess the age, area,
and price, recording all of this information. Then compare
your answers with the information you gather from the real ones
real estate agencies, the seller himself or leaflets that you
collect. This method alone will introduce you perfectly
your market in a very short time frame.
You need to understand how important this step is
evaluating your trades; otherwise incorrect assessment of one property value
it can put you out of business because it puts you back to work
for that dull boss some call work. Your goal
is to learn all about your market so when you get a
lead, you will have a good estimate of what the house is worth
area is before you even leave the house. Start using today
these three methods evaluate your market and you will build
your business on a solid foundation to avoid a common mistake
overvaluing real estate, which many investors do.
Full-time real estate investor Derek Pierce shows you the exact strategies for his success in his free book: "How I Went from Corporate Guinea Pig to Real Estate Success." Get your copy by going
