Real Estate Business Investing Rules
In these years when I did the real estate business investor, I saw that there are some rules that, good or bad, are always true in all markets. I’ve bought it all over the world and abroad and these rules work.
I’m 7 – and one I’ve already talked about, but it’s worth repeating – and I would really like to call it “golden rules.”
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Following the 7 golden rules of investing in Real Estate Business for your benefit and profit
1) Money is made when you buy it, not when you sell it
If you buy discount, you will never be wrong. You will also not buy the world’s most liquid real estate, but when you have the money to sell it, everything becomes easy.
Conversely, if you buy at low discounts or at a market price because “so much the market goes up” you find yourself placement with the wax in your hand.
2) Always buy from a motivated seller
Who is a Motivated Seller? One who wants to sell, that is a person who no longer wants to keep that property for any reason. In short, you are not wasting time with someone who clearly has time or money and wants to make the most of it. Look for one who does not have the time or maybe even money. It will surely be motivated!
3) Love the deal, not the property
It happens that a property you like, maybe even a lot. From that moment on, you can not be objective anymore. But remember that it is never the real estate that makes the money, the brick does not put it in the bank. It’s the deal that the building represents that makes the money. Always focused on the deal, never on the property.
4) Learn to negotiate
If you really want to learn to negotiate, there is a seminary that teaches you. However, a simple rule is this: never say first a price. It’s an empirical rule that works on all sales opportunities, not just with real estate. The first one that mentions a price will eventually lose. The same property can be very different (up or down depending on whether you are selling or buying) and basically depends on your ability to negotiate.
5) Try to buy with a few or zero money
Real estate business is a business to do with debt. Investing in real estate with its own money undermines the benefits of this type of investment. So always try to buy with as little money as possible, or, better yet, with your zero money.
You offer very low payouts (parts of the hundreds of euros) and make purchases that you find embarrassing (at least 30% below, better 50% then dealing). Remember rule No.1 of real estate investment.
6) In the capital buildings first, cash flow then
I have written so many times and repeated to my seminars the importance of cash flow. Cashflow is the good health of a real estate business. You can also have a profitable business, but if your cash flow is negative you will easily end up in the air.
With real estate, cash flow is made “by making income” by renting. However, it is very difficult to have a positive cash flow if you rent a property on which you are paying a mortgage. Instead, you will have to create capital through trading and then use that capital – along with the leverage – for larger operations that will have the goal of generating cash flow.
7) The real estate deal of your life happens every week
Real estate business always exists, in every market period and in every market. Anyway, the problem is finding them. But to start looking for them you have to start believing that there are (because there are, I can guarantee you). If you begin by thinking that you can find homes at least 30% discount, with financing options for your benefit and with easy and profitable sales opportunities, you will begin to find them. Every week there will be at least a chance to make a real estate deal. So if the one you’re dealing with does not fully convince you, believe me, the sea is full of fish. Go to the next property.
Seven rules that really are the basis for investing in real estate business. And if you decide to become a real estate investor, you will come naturally. And how do you see it simple and based on what can be called “commercial intelligence”: buy low, be good at negotiating, do not fall in love with the products, but the wealth that the products bring you when you sell them!