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Real Estate Investors, Don’t Get Caught in the War Zones
When you are just starting out in investing there is one mistake that a lot of real estate investors make and it deters them from being able to ultimately grow their investing expertise. In the early days, most investors only focus on doing business in the low priced properties, in the low-end neighborhoods. What you and I may refer to as the war zones.
And the reason why I think people do this is because the numbers are smaller, there’re fewer zeros at the end of the property value. So, I think it makes you feel a little bit more comfortable in working in numbers that are not so big. But, to be honest, it takes a certain kind of person to be successful in doing business in these types of areas because it’s difficult to do business in these areas.
And if you think about it, it really is kind of common sense because if you’re going to buy a property and rehab it or lease it out or resell it or put tenant buyers in it or whatever, there are not a whole lot of people that actually want to live in these neighborhoods. So, these neighborhoods are for low-income families and most people who you’re going to want to sell to are not going to be low income families.
Because, whether you believe me or not right now, most of your problems in this real estate business are going to come from low-income properties. It’s going to come from the crap properties that you get because with, no disrespect, but with crap properties, the only people who want crap properties are crappy tenants.
And with crappy tenants comes crappy income. And with crappy income comes difficulty getting paid. So, if this is something you want to pursue, fine. Is it something that I would recommend you pursue? Absolutely not.
There are many, many other neighborhoods and properties out there to do business in and make good money at. So, don’t feel as though you have to start in the low end priced properties just because the numbers make you feel more comfortable because in the long run you’re going to find that there are more problems in these areas and these neighborhoods than you ever thought imaginable.
Yes, a higher priced home has more zeros to it’s value, but that doesn’t mean you will really approach the deal any differently than you would any other deal or buying a lower income property. Investing is still a numbers game and it comes down to the formula you use to determine your maximum allowable offer, taking into account the after repair value and the repair costs. Don’t let larger, higher valued homes intimidate you. If you do, then you will let just about any other person or deal do the same and your investing will not prosper.
So, with that said, really think twice about working in low priced properties because war zone homes and these types of tenants are not good tenants, in fact, they are the worst tenants that you could possibly find.
I’ll be glad to share the many times I was burned by these types of properties. Want to learn from my mistakes? Go here: www.freemakemoneygift.com/Invitation.html
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