Tips for Real Estate Investors: How to Rehab?

You would have heard or read by now that the real estate is still coming down and the bottom may not be seen until 2011. But this isn’t doom and gloom if you are an investor. Right now, it is probably the best time to invest in real estate when the values are down and the inventory is available. An optimistic viewpoint of looking at the difficulties is looking for the opportunities hidden behind them. And in these difficult times it is most probably the rehabbing of disrepair real estate that you can expect profitability from.

If you say you don’t have any money then it is not something you can’t change. This is where a hard money or private money lender comes in to provide you the resources to invest in your future. As soon as you decide to get started, this is the time when you will soon start looking at enlisting professionals such as real estate agents, appraisers and other successful investors in order to help you build your business and your estate. Here are some tips for the investors looking for opportunities in the real estate rehabbing market.

When it comes to evaluating a property to invest in, you should look for the one that you can price lower than the neighboring market after you would have rehabbed it. How can you know if you have found a good property? Well… take a look at the lowest “Solds” being fixed up and the lowest “Actives” in the immediate area in good conditions. Basically “Solds” tell you about the history and “Actives” show you the future. Make sure you are looking at the comparables related to the exact neighborhood or the immediate area. Too many times investors have gotten comparables from areas which were outside the neighborhood. This mistake can cause you hardships like longer holding period, lowering the price and even losing money.

If you will go conservatively; making smaller profits on more deals, then you will have greater chances of success as compared to going aggressively for few bigger deals. So, the best approach to this business is what is traditionally stated as: “slow and steady wins the race.”