If you think real estate investing and buying and selling fixer-uppers is merely a hobby to be taken lightly, realize that investing, especially in the real estate market can be a complicated but rewarding undertaking. While indeed there are simple ways of making it all work, it's still a serious business and must be looked upon as such. For this very reason, here are eight important questions to ask yourself first before attempting to make your mark in real estate:
1. Count your capital, how much do you have? What percentage of money do you have right now to put towards buying your first, of hopefully many fixer-uppers? Will you have 20 percent, 10 percent, or perhaps, even no money at all? Using as little of your own money as possible while still having some leftover for backup purposes is the best case scenario.
2. What is the amount you can afford to borrow? Remember you'll be the one repaying the loan until you find a renter or a buyer, so be sure to figure out what the monthly payments will be ahead of time to ensure you aren't scrounging for funds at the end of each month.
3. Have you decided if you will sell, hold, or do both? Depending on your individual circumstances, the best way to turn a profit quickly is to hold, then sell in order to continue building up properties while still being guaranteed a steady flow of income.
4. What are your areas of expertise? Are you savvy about matters of foreclosures, or are fixer-uppers more your specialty? What type of experience do you have working with appraisers and other investors? Learn as much as you can before jumping into the business head first for the best chances of thriving.
5. Who will be doing the renovations? Are you skilled enough to handle most of the work yourself, or will you need to rely upon the experts to do the majority of renovations? If so, you'll want to hire professionals and be sure to account for the extra cost.
6. What is the minimum amount of profit you expect to make? A general rule of thumb is to aim for at least 20 percent of your total investment in order to make the project worth your while.
7. Do you have an exit strategy, and if so, what is it? Having an exit plan in place as well as being prepared for any contingencies that may take you by surprise is imperative to protect yourself in the event things don't turn out as you envisioned.
8. Have you, or do you know how to build a team of experts? Once you become more experienced in the world of real estate investing and turning fixer-uppers into profit, you'll begin to develop a network of knowledgeable people who can help you become a success. These people include accountants, appraisers and attorneys, as well as contractors, builders, real estate agents and mortgage brokers.
Don't be a part of the 90% of new business ventures that fail and have a clear plan in mind while focusing on the previous issues before delving into renovating and selling fixer-uppers.
Sal Vannutini is the author of " The 8 Power Profit Secrets To Making More Money With Less Risk In Real Estate, " a free strategy report for investors. Get your complimentary copy at http://www.FastFixerUpperProfits.com today.
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