Posted by Ronald * Starr on April 14, 2001 at 17:04:22:
Mary,
I suggest think YES FOR SUCCESS in R.E. investing:
Y–You
E–Environment in which you invest
S–Strategy of investing
Everybody is different, so needs a different strategy that they like and fits them like their own clothes. You might look ridiculous wearing my clothes and I’m sure I’d look ridiculous wearing yours. You might go broke using my investment strategy, I might go broke using yours. [actually the strategy goes between the you and the environment so it might be called YSE for success, but that sounds stupid. I think YES FOR SUCCESS is neat and easy to remember.]
Your strategy also has to fit the enviornment where you invest. Consider what is going on in your area and evaluate different approaches. Different things work in different areas at different times. Foreclosures in San Francisco as an investment now would be ludicrous–too many professional players with huge amounts of money available – a beginner would either get nothing or overpay.
You may already know the line: FIND A NEED AND FILL IT. Lonnie Scrugg’s mobilehome deals fills the need for small loans for (usually) lower-income people desiring to own their own homes. Lease/Options help those whose credit is a little too poor to buy a house now, but they will qualify in a year or two or three. Find out where you can help people in your part of the country.
Consider the deals you already did. What did you learn about what you like to do to and don’t like to do? What are you good at and what should you leave others to do? I hate negotiating, so I don’t. I buy at auctions. I enjoy research work, so I go into county records and find out the situation on properties that I might be able to buy. I hate to pay more than half price for properties, so I have to find super-bargain purchases (under 2/3 of market value). I specialize in tax-sale properties, even though there are few of them in any one county and very few with structures on them. I have to check gobs of properties to make a few deals. Some people could not deal with all that “wheel spinning.”
Some people like math and invest in notes and restructure notes. Some people like to do fix-up and decorating work, so do fixer-uppers. I buy some fixers myself and find about half-way through the job I feel like quiting the work. I need to adjust so I buy fewer fixers and more already ok properties.
Best is to have an investment program or strategy that plays to your strengths and does not require skills or talents that you lack or do not like exercising. Think of the real estate market as a competitive marketplace. What are your strengths that can get you profits where somebody else might be floundering? What do you know that the competitors do not? How about the neighborhoods poised for a sudden spurt in values? How about how to fix fire-damages properties? How about how to screen potential buyers and counsel them on financial matters so they can clean up their act and buy the properties? Some people would hate to work that way–how about you?
What resources do you have that you can deploy to make you money?
Assets, properties, cars, boats, planes, etc
Cash (you’ve mentioned having some)
Credit (you’ve mentioned a line of credit – good going gal!)
Contacts – seller, buyers, lenders, repair folk, bird-dogs to point you to deals and people, etc
knowledge of geographical areas, types of properties, businesses (have you run a business so know what kinds of properties and locations would be great for that kind of business? Find locations there, buy, and rent to your buddies in that field.)
sales skill
guts
analytical ability
cautiousness
…
Well, perhaps that’s enough to get you thinking and formulating the MARY-APPROACH to making money with real estate where you are. Sure, look at what other people have done or are doing, but adopt the parts that suit you and adapt the ideas to your own approach.
Good Self-Insight = Good Investing=======Ron * Starr