Late-night infomercials depict real estate investors as tanned, smiling, and conducting business by the pool of their mansion. Some investors do have a fleet of expensive cars, a beach house, and an affinity for tanning beds. However, what is not accurately portrayed in this idealized representation is all the hard work, boring work, and failures that are part of being a real estate investor.
Many people are drawn to real estate investing for all of the benefits, but they fail to consider the day-to-day responsibilities that come along with building a profitable real estate portfolio.
Auctions and low-ball offers
A large part of every workday is dedicated to searching for properties. One of the most disheartening realizations every real estate investor encounters early on is that there are a lot of people out there trying to buy investment properties.
Some people have been investing for decades. Others are novices hoping to find a fast track to financial independence. The old-timers have their own niche, but the steady supply of new investors will drive up bids on distressed properties.
As a prudent investor, you have to base your offers on the return on investment you can reasonably expect from a property, not on the price the seller is willing to accept. That can mean a lot of offers do not get accepted.
Crawl spaces and contractors
Real estate investors should have passion for what they do, but they absolutely must have knowledge about building repairs and property management. You always need to look at properties with a very critical eye. That involves visiting properties personally and trying to find potential problems. Moisture and foundation issues are common.
You are not going to order a home inspection for every house you consider. Building a team of trusted assistants who know your criteria takes years. You will spend some time visiting properties and negotiating with sellers without reaching an agreement. You will also spend some time viewing properties that are not even worth making an offer on.
When you do find a property that you can’t talk yourself out of buying and you reach an agreement on price with the seller, your work is just beginning. You will most likely have several properties at various stages of the process at any given time. Even the best contractors need you to push them to stay on schedule.
While some of your work can be completed poolside, most of it requires you be on site and on the road. Be sure you have a good-quality, hands-free device for your phone!
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