The real estate market has been feeling crowded.
Some would say that the best thing to do is to step out of the frenzy and wait for things to calm down. While that’s a valid strategy, you may miss out on opportunities that will take your investment portfolio to the next level.
You might feel as though there are no good opportunities out there. There are. What many investors lack are the resources and strategies necessary to get a leg up on the competition!
5 Ways Investors Get the Upper Hand in a Crowded Market
1. Stay on Top of Communication
Making deals is all about communication. In the age of incessant spam calls, it may be tempting to ignore your ringing phone unless you recognize the number. You never know if that call is your next big lead or an all-important follow-up call. When you’re looking to close on a property or find the next great deal, you can’t afford to wait. If you miss a call, call back as soon as possible.
Email? Follow-up as soon as you can.
You can help cut down on the noise by installing third-party apps like Truecaller, RoboKiller, Hiya, or Nomorobo to help identify and weed out spam, robocalls, and fraud. It’ll help ensure that you know who’s calling and whether or not they’re worth your answer.
2. Have Financing Ready to Go
The golden rule of winning a bid in real estate is to have your financing in order. In this market, homes are moving fast. If your financing is going to delay a transaction, you’re less likely to win the bid. Find a lender that has experience dealing with real estate investors — this will help as you navigate financing.
Do the number-crunching ahead of time so you know how much you need and what money is necessary for closing costs, insurance, and down-payments. Streamline this process as much as possible — you’ll be doing it a lot!
Similarly, protect your credit score. Lending standards are tougher than ever and if you want the best rates, you’re going to want the stellar credit score to get you there.
3. Know Where You Are (and Aren’t) Willing to Compromise
Throughout the wild 2020-2021 real estate market, we’ve seen buyers beginning to regret their decisions. This is because they got so caught up in winning the bid, whether out of a sense of personal attachment to a house or the spirit of competition, that they compromised on due diligence. We’ve seen buyers waive inspections and grossly overpay. They end up with mortgage debts far beyond a comfortable debt-to-income ratio.
For real estate investors, you have to know where you are willing to compromise and where you are not. We’ll tell you this right now: never forgo a home inspection. The surest way to end up with a dud property is to skip over these critical steps.
Don’t compromise on due diligence. Know how much wiggle room you have in terms of price. What still makes sense for your debt-to-income ratio?
And finally, don’t get attached. What was a good opportunity can quickly become a bad opportunity if you compromise in the wrong places. Skip souring numbers and wait for something else to come along.
4. Clarify Goals & Timelines
Real estate investors must be agile. We hone our agility by figuring out what we want and when we want it. When you have clarity in your goals and at least a loose timeline to accomplish them, you’re more motivated to make it happen. Leave room for timelines to change as opportunities come and go, but always keep a keen eye on your true purpose.
5. Partner with Good People
A real estate investor is only as strong as their team. Depending on your real estate investment strategy, there are different ways to establish partnerships. They might be teams and companies that you have individually and personally identified. It might be an all-inclusive turnkey partner — a one-stop shop for management, renovations, portfolio advisors, and properties.
Regardless, you want people you trust and people that have your best interest at heart. Focus not only on reputations but on proven results.
The right partners can help you find deals while avoiding the stress and elbow-throwing in today’s over-saturated real estate market.
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