So you want to make some quick and easy money? All those programs on TV make it look so easy and wow they make thousands within weeks. Investing in Minnesota real estate can make you some good money but it can also make you go broke.
All those TV shows are only showing the small reality of making money in real estate. The truth is you have to be prepared to loose money too. You need to have a qualified team working with you to make it happen and happen on time. Buying a house is easy it’s the work afterwords that makes it tough.
- First and foremost you need to have a Realtor who works for you and only you. Don’t think if you call the agent who is listing the home you will get a better deal, wrong! Commission prices are built into a listing and don’t change if only one agent sells the home. That one agent just gets twice the commission and has less responsibilities to you.
- Do an inspection! Don’t ever buy a home without having a qualified inspection done to it. You never know what problems you might miss. Spend the few hundred dollars and make your transaction a little more stress free.
- Check for city sponsored rehab loans or special financing. Some cities want to help clean up their housing inventory and will give you money for nothing or next to nothing.
- Find the right contractors. Don’t just hire your best friend to do the job. It needs to be done right and with permits or you won’t be able to sell it on the backside without a problem. Never pay a contractor for anything more than supplies before they finish the job.
- Do a good rehab. Buyers aren’t dumb and if all they see is a paint job and new carpet they will know they are being screwed. Do quality work and actually fix the home without cutting corners. I can’t tell you how many times I have heard a buyer tell me in a rehabbed home, “if the didn’t do that right what else did they not do?”
- Be prepared to hold the house for 6 months. Some banks when buying a foreclosure will not allow the property to be resold for 60 days from when you buy it. Some lenders for buyers won’t allow it either. You also need to be prepared to hold the property for a few months before it closes to the new buyer.
- List it at the right price. I know you want to make money, after all you bought the home and fixed it up to make that money but be smart. Don’t be the highest priced listing in the neighborhood because it won’t sell. I advise to my investors to list it for 3% lower than the closest competition and let the beauty of the rehab sell it quick. In fact, many times it will lead to multiple offers and a higher profit margin for you anyway. Think about it, would you rather list a home for a few grand less to start or over price it and spend thousands in interest while it sits?