While real estate investment is a respected industry as a whole, there are certainly plenty of misconceptions surrounding it. In our time in the industry, we have heard it all. However, given our platform, we wanted to take the opportunity to address and discuss a couple of common concerns people have about real estate investors and investing. As always, feel free to leave a comment below and/or share this post!
Plenty of individuals have made a livelihood in real estate investing. It’s a matter of getting your feet wet and learning how to thoroughly and accurately analyze a deal. There is not a one-size-fits-all formula. Prices for labor, land costs, and home values will vary according to location. Establishing good relationships with local contractors, vendors, and even other investors will help you to establish your own formulas for calculating costs. Money on a deal is made when you make the initial purchase. This is why it’s so incredibly important to know your numbers before you even make an offer. If you overpay for a property, it will be extremely difficult to make money. When you are educated on the numbers and work with an awesome team, making money becomes much easier!
This one may hurt the most. No one wants to be viewed as a villain.
Here are the facts: Unexpected financial hardship plagues many people in life. Real estate investors are often able to help homeowners out of sticky situations. Consider the following:
A homeowner may not have been in a position to carry out home maintenance for many years. Properties that have fallen into disrepair may not qualify for a mortgage. This means that the buyer pool for that seller is limited to those who can pay cash. For such a property to become “market ready” in a traditional sense, the seller may have to spend tens of thousands in repairs. This is where an investor can step in and help alleviate the stress. While the investor may purchase at a discount, the investor assumes all risks and liabilities.
Consider estates. Often, an heir will inherit a property from a deceased relative. The heir may live out of state, or just not have any interest in keeping the property. Either way, they are grieving. And while they grieve the loss of a loved one, the last thing they want to do is deal with costly repairs of their loved one’s 100-year-old house in order to prepare it for market.
We also buy from other investors! We picked up a property that another investor had started renovating prior to the tornado that hit Nashville this spring. The investor was able to make an insurance claim, then sold the property to us. Win-win!
At Southern Legacy Homes, our goal is, and always will be “people first, money second.” We surround ourselves with other professionals who feel the same, and avoid those few “bad apples” that don’t. Plain and simple.