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FINANCE TIPS FOR SINGLE MOMS
The 10
Mistakes to Avoid in Real Estate Deals
By
David Finkel
Author of
The
Maui Millionaires
 Viva Research converts your free time into hard cash! Take surveys from home and get paid from $5 to $75 per survey completed. It's FREE to JOIN. Instant surveys available! Click here to start!
TIPS
Mistake #1
They take TOO Long. Good deals don’t wait around for
indecisive people. Many people “think a deal to death.” One
way to lower your anxiety level with a deal is to move
forward provisionally (i.e. with a clause of some sort.)
Mistake #2
They trust the seller’s numbers. Even if there are only good
intentions, most sellers just aren’t knowledgeable, and they
are inherently a bit biased.
Mistake #3
They trust appraisals. An appraisal really isn’t meaningful,
unless YOU hired the appraiser, and YOU gave the
instructions, and YOU are handing the appraiser the check.
I can influence an appraiser to appraise a “$100,000” house
for as little as $80,000 and as high as $120,000 (or more).
That’s a 20% variance! That’s a lot to have in a marginal
deal. So take any “appraisal” the seller hands you in the
spirit that it was intended--as a MARKETING piece!
Mistake #4
They do their math in pencil. The next time you catch
yourself thinking it’s okay to “fudge” your numbers a little
to make the deal cash flow or the rehab payoff, BEWARE! Some
investors have a tendency to “play” with the number a little
to make them show a marginal deal is better than it really
is.
Mistake #5
They overestimate market rents. This one happens all the
time. The way you know what a house will rent for is to do a
market rent survey. The rents listed in the paper may or may
not be accurate.
Mistake #6
They overestimate “as is” value. So many investors forget
that to turn a house in 60 days or less requires the price
to be REAL--not pie in the sky. Be conservative in your
estimate of value going into the deal. The worst case then
is that you make MORE money than you thought you would!
Mistake #7
They get bogged down in process. Use a “Layered” Approach: I
will be talking about this innovative way to analyze a deal
FAST on
Real
Estate Radio.
Mistake #8
They worry about the house on the first layer analysis. On
your first pass, you are only concerned about three things:
-
Why is the
seller selling (motivation level)?
-
Is there any
equity?
-
Would the
property cash flow if you held onto it?
Mistake #9
They underestimate the time it will take to flip, fix, fill,
or sell. I’ve bought a lot of houses from investors who got
stuck with holding costs too much for them to handle. Be
careful here.
Mistake #10
They SKIP analysis until the deal falls apart on it’s own.
Wishful thinking isn’t pretty.
Bonus
Mistake #11
They hide behind analysis when they are AFRAID to act!
About
Author:
 David Finkel
is one of the nation's most respected wealth masters. A
former Olympic-level athlete, he is a self-made
multimillionaire and the cocreator of Maui Mastermind, the
world's most exclusive wealth retreat. He is also the
bestselling author of five financial books, including
The Real Estate Fast Track,
from Wiley, and his how-to financial articles have appeared
in periodicals across the
United States. |
