This is a great topic of discussion, probably one of the best articles to have been written so far. So please pay attention to what I have to say here. Many people believe that images on Loopnet or some other real estate site are good enough to make a million dollar decision on a property. If you don’t see the product in real life and even walk the property, you will get burned – I promise. The thing is, you can’t even rely on someone else that is in that location to make the decision for you. Always make sure you know 150% of the information you need to know in the areas you invest in. So say you are interested in a certain property: what are the tenants saying? Are there any repairs that you need to keep in mind as expenses? These are all things that a broker won’t tell you, even if it’s your father.
So you need to be able to determine whether the property is worth as much as its listed under, or even if it’s a good deal. The first thing you need to look at when thinking of properties is: do you love the deal? Because if you love the deal, then price doesn’t matter. If the deal is a good deal, you don’t mind overpaying for it. But you can’t know this beforehand. You need to be able to know your market. Is that part of the city ghetto communities? Will you have to deal with the tenant that got shot because he couldn’t pay for the latest shot of heroin he got?
“But Anthony, what if there isn’t much around here?” Then make it a habit on the weekends to walk properties that are near to you. Move over to the next city and see what’s happening there. Spend some time and get to know your market, get to know the value of each place and how good of a neighborhood is it. Even speak with the locals and ask questions. Guys, you will never get something going if you don’t spend time. If you think you can put together a real estate deal just like that, in a few days or months, then you are mistaking. This is a full time job, and unless you intent to treat like one, you will get burned. And that is a promise!
Many times it makes sense to partner with other individual on real estate deals. Most of the time, it’s done because of the lack of money or the safety it provides. If you are getting along with your relatives and family members that perhaps are living in a place that favors real estate investing, then you can partner with them. They should know the markets and how good they are. So you can pretty much get all the info you need from there. But never go into a partnership with someone if you don’t plan to have the same amount of money that he does. If he has less money into the deal (and especially if it’s a significant amount) then rest assured something will go south. You need to be able to have people that are obsessed with it and making sure it will work out. If you get lazy partners, they will suck the living life out of you, and most likely the funds in your bank account. So you want to make sure the people are as interested as you are, in making this work. This of course will tie into another article I will be writing about today (regarding partnerships.)
But this pretty much gives you a perspective. You are not selecting shoes on the Internet: even in that case, how many times have you bought something that wasn’t as good as it looked like or is too small etc? Imagine when it comes to real estate. You need to be there, and feel it, taste it and smell it.
Ask me anything! I really want to help you out as much as possible, and if that means avoiding the mistakes I made when I just got started with real estate, then so be it.