[investor Tips} Biggest Mistake – Trying To Buy Every House

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Topics: Deal Stories

One of the biggest mistakes I see investors make it to think they need to actually attempt to “buy” every  real estate opportunity that comes their way. 

So, their deal structuring is all based on the amount of cash they have to invest for purchase or fix up.  Or, the availability of private or hard money financing.  Or, if purchasing with seller financing, the payment made to the seller each month needs to be less than the payment you can collect from a tenant or buyer.  If they can’t make any of those numbers work, many investors just pass on the deal.

Instead, it's better to be very selective about which properties you actually buy.  Just get an option then wholesale everything else.

For my real estate portfolio, I only wanted houses in certain areas and they had to be in pretty good condition (minimal cosmetic repairs).  I'd either keep them as a rental property or sell with seller financing.  And 99.9%of these homes were bought with seller financing or subject-to the existing financing.  These were my cash flow properties.

Any properties that did not fit that criteria, I would just get an option then wholesale to another investor.  This included houses which were not in my ideal area.  It also included houses that needed too much work. Sometimes my offer was to buy for cash, sometimes with seller financing.  These were my chunk of cash deals.  I did many more of these types of deals!

I discovered early in my real estate investor career that fixing up houses takes too much time and money. This took time away from doing more deals.

By doing some deals that generate cash flow and some deals that produce quick chunks of cash, it is much easier to achieve your financial goals faster.

When a real estate opportunity presents itself, you need to decide early on which bucket it will fall in to…

(1) ideal area, buy with seller financing, cosmetic repairs only – keep it!

(2) just get an option then wholesale to another investor or buyer to make quick cash.

This will help you determine which deal structuring strategy you should use when talking to motivated sellers. 

Best of Success,

Jackie Lange
www.CashFlowDepot.com

P.S.  Jack Miller left the house each morning determined to not return until he made $1,000.  It is quite possible to do this when you just get an option then wholesale to another buyer.  Today, that number might be $3,000 or $5,000 per day!

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