Real Estate investing can make you hate or love owning property and much of that outcome can be entirely decided by luck. Luck is definitely a factor in Real Estate (like many business ventures) but luck only lasts for so long.. Here’s a few tips I’ve learned from some of the true Edmonton Pro’s who make money over & over on every deal the pursue.
When I first began investing in Real Estate I was convinced the only thing worse than a bad Real Estate deal was letting your capital rot in a bank account or low risk mutual fund. After some time spent working with a few guys who are truly the best in the business, here in Edmonton, I learned there’s always a better deal.
The key is to find the right balance between a ‘rare’ deal and a ‘unnatural’ deal a rare deal happens every day in Edmonton, someone will find a piece of property for 10-$30,000 under the current market price, which is to be expected with real estate as the market is not entirely efficient. An unnatural deal is the type of deal you hear about from a friend of a friend – someone who found a giant lot in Westmount with an old lady who wouldn’t let him pay more even though he insisted (a true story I actually heard once). Unfortunately, waiting for this deal is like trying to win the lotto and the man power to finally find this perfect lot often goes unrewarded. What I’ve learned – be patient but not hopeful and put the time and energy you would waste on countless walk through’s and negotiations towards making that one ‘rare’ deal into a really fantastic flip or cash flowing asset!
#2 It’s Okay To Spend Money on a House Before You Buy It
If you find a really great opportunity but the house is a little rough around the edges, do not skip the 300-1,000 dollars it takes to get the place fully inspected. The main reason is to prepare yourself for what is to come. It may be hard to spend that sort of money up upfront before the house is yours but knowing what’s behind those basement walls or lurking in your sellers attic is definitely worth it.
An example how this could work towards your benefit: I recently purchased a home in Elmwood, it had been on the market for 106 days (usually this is a bad sign) – I spent about $600 on inspections before buying to find #1 the seemingly poorly build upgrades were to code #2 the electrical & plumbing where fine #3 the house was in good shape structurally. After 106 days on market the sellers were pretty much convinced the house was worth land value. I got the house for 285K & the initial listing price was 370K! That’s not too bad!
So, in the future: Don’t fall into the trap of expecting too much from a real estate deal and Don’t get careless about ensuring the asset you’re about to buy is truly as good as you think it is!