I just love the simplicity which Dolf explains things when it comes to investing in properties. I keep these 8 rules, on a piece of paper stuck up on my wall so that I always remember them. And, it has helped me greatly when I was aggressively buying my rentals last year. I helped me to focus and I hope it will help you too.
1. Put no or as little money down as possible.
This is important especially if you are on a blitz to acquire many properties. Try asking for a 2 or 3% earnest money instead. You will find you will have more money to buy other properties. How do you do this? just tell them that's what you always pay, and most times the agent/owner will agree.
2. You make money when you buy
So, make sure you pay attention to the price you pay. Always know what is the market price and strive to buy at below market price. How do you do this? I will cover this later on in the blog, and is probably one of the most important steps in creating positive cash flow from yr rentals.
3. Don't sell unless you have to
Well, don't sell ever would be too strong, hence I said unless you have to. Why kill it if it's the Golden Goose? Of course, if its dud and you are sure that it will not change, then you may want to sell it. If the property is appreciated, then you may want to consider refinancing it, every few years to get some cash out. (to buy more properties?)
4. Fall in love with the deal, not the property
Ah, this is a very important rule: Most times you won't be living in the place anyway, so why fall in love with it? What you need to know is this: someone wants to live in it, am willing to pay rental for it, and you want to get it at a bargain price, if possible. So, negotiate based on facts, not emotions.
5. Be countercyclical
I am a contrarian by nature. If people say the economy is bad, I tend to think otherwise. Why waste a crisis? there are plenty of opportunities to be found. In a bad market, there are still bargains to be found, so do not despair. It is probably easier to find a bargain in a bad market than when the price of properties are sky-rocketing!
6. There's a deal of the decade every week.
It's true. Never get hung up if you make an offer on a unit, and the deal falls through. There is another one just round the corner which may be even better. But, you do need to work the numbers, and "see" many, many properties before you find one that makes a good deal.
7. Never be the first to name the price
If you name the price, you lose. You could have got it cheaper, and in negotiating, naming the price is always a bad move. So, you have to encourage, or persuade or do whatever to make the other side to name the price. Then, we can negotiate from there. The asking price is never the final price, in any case.
8. Always buy from a motivated seller
This is a critical rule to stop you from wasting time. I never want to buy from someone who says " Well, I would like to sell but, if I don't get the right price, I won't" Then he is not motivated, and so I will move on. Later I will tell you about how to spot a motivated seller; and how that can help you buy below market price, all the time.
Have a good one.
Chris
No comments:
Post a Comment