Five Steps to Becoming a Successful Real Estate Investor by John P. Myers

Five Steps to Becoming a Successful Real Estate Investor

Find a Motivated Seller. You can usually determine if a seller is motivated within the first five minutes of your conversation. While talking and asking questions, you will be able to determine if the seller wants to, or needs to sell. If you do not have a motivated seller, you will not be able to negotiate your price or terms. You will usually have to talk to 20 – 25 sellers before finding ONE motivated seller. The key is to learn to weed out the "tire kickers" in order to find that ONE motivated seller.

Evaluate the Deal. Once you find a motivated seller, you need to evaluate the deal. You must be able to determine if a deal is worth your time. The criteria to use to evaluate a deal are: location, seller motivation, condition of the property, price, and financing. These criteria will determine whether to "cut it loose", evaluate it further, or move on it. In most cases, the lower the price, the better the deal. Sometimes, you may trade price for terms. After completing your evaluation, not all motivated sellers will be deals.

Write an Offer. Once you complete your evaluation and determine whether the deal makes sense, it is time to submit an offer. The offer must always work out to be a win/win situation for both you and the seller. Be sure to include "exit" clauses to get out of the contract in case you have trouble obtaining financing or find a problem during the inspection period.

Line Up Your Financing. There are several ways to finance a deal: conventional lenders, hard money and private lenders, are just a few. Always use a title company or an attorney, even if the seller is still holding the note. During this period, you will also do home inspections and any other research. If you truly have a deal, the financing is easy.

Follow Through With Your Plan. Remember what your original plan was for the property and stick to it. If you bought it for a long-term hold, do not expect to make a profit overnight. Also, do not get greedy and try to increase the price after you have agreed on a sale price.

Do not get caught up in over-analyzing a deal. Focus on one step at a time and you will get more deals done.

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Five Steps to Becoming a Successful Real Estate Investor by John P. Myers
Real Estate Investment