To be an informed investor, do the following:
1.Always to determine the fair market value (FMV).
2. Determine the market trend for the area for which there are two critical pieces: 1) is the average price increasing AND 2) is the volume of sales increasing. If both are moving in your favor, then you have the comfort of knowing that the right trend is in place to keep prices moving forward.
3. Learn about supply. If you are competing with a bunch of new houses that are coming on-line, then rapid price escalation may be limited. Investors like to see lots of demand with very little supply which is nothing more than common sense.
4. Develope your OWN opinions of the conditions of the local and regional marketplace. If it's overvalued, why would you ever consider investing? If you believe that market forces will continue to escalate in the market, then buy.
5. Evaluate the rental market.By looking at rental r ates, relative to the amount of principle, interest, taxes, and insurance (PITI) that you will have to pay, then you can understand the amount of cash flow that may be required to support the property.
6. Be aware of any and all deferred maintenance. How much maintenance has the previous owner neglected that you will need to catch up?
7. Determine your own personal risk tolerance. You need to understand your risk's going in, how to limit your downside, and make sure the gains are much larger than the risks you are taking.
If you would like the chance to work with me or one of my fellow real estate investor coaches and our advanced training programs, give us a call anytime to see if Dean's Real Estate Success Academy and our customized curriculum is a fit for you. Call us at 1-877-219-1474 ext. 125