1. Plan Before You Buy
You probably heard of the ideology, “Begin with the end in mind”. Before purchasing a property, you should have your end game and plan set out. Things never tend to go as well with the “I’ll figure it out later approach” and usually, there’s too much financial investment on the line for that level of risk. You should always know your out – whether its to rent, sell or wholesale – make sure you have an executable plan.
2. Mature Grown-up Adults
Chances are you will need to do some level of renovation to most properties purchased as an investment. When hiring contractors make sure that they are mature, grown-up adults. This means that if you feel like you’re going to need to babysit your contractor, they probably shouldn’t be your contractor. If someone doesn’t seem like they’re going to be reliable, they probably won’t be. Hire slow and fire fast is completely appropriate in this world to. Always seek references and never pay a majority of the construction cost up front (I’m even hesitant to do half).
3. Understand Your Market
If you plan to fix and sell, you should know what else has sold over the last 6 months within a 1 mile radious or less. If you plan to rent, you should know how much properties are renting for in the area. You should also get an idea of the level of finish there is in the successfully sold or rented homes. Please DO NOT watch HGTV and think that you can list your house for 50% more than everything else on the market just because – I promise, that is not how this works. Its not how any of this works.
4. Run Your Business Like A Business, Not A Hobby
Set a schedule. Track your finances. Set goals. Set expectations for your team and yourself. If you don’t run your business like a business, you can’t expect anyone to treat it as such – including your contractors or anyone else you hire.
There are a lot of ups and downs in this business. Like any entrepreneur will tell you, there are high highs and low lows…sometimes in the same day. To be successful, you’ll need to learn to keep a steady head on your shoulders and breathe through each phase. Personally, I choose yoga and meditation to quiet my thoughts and cleanse any negative energy. Whatever works for you, be prepared to do it because in this business, there is always something unexpected that will pop up when you least expect it.