Real estate investors always have a maximum amount in mind when going after a property to invest in; their plan is to never exceed this amount. But the nature of men to get competitive in auctions or biddings often results to exceeding this maximum amount as planned.
Overbidding for a property is pretty common scene during auctions. This is maybe due to the fact that you're in the room with your competitor and you're constantly judging their reaction to every bid. The feeling of bidding once more to get the property is pretty overwhelming and most of the time you would end up way over your ceiling price.
Another common bidding situation that an investor runs into is the open house "bid taking hour." In a lot of cases like this an agent will be working with a bank or a private owner who is motivated to sell a property that has been badly neglected. Instead of going through a formal process the agent will let a group of investors know about the property then he will arrange a showing over one day period and the following day he will submit the offers to the property owner.
There are instances also that these open houses can span from a day to a whole weekend. And there are even some that only opens for only an hour to show to the investors and that's the span of time for you to make a decision. What I wanted to tell here is that, in these transactions, you have to make a decision quick but accurate.
It is at this point where a good investment plan works in the investors favor. An investment plan is basically doing your homework before you ever get to the auction and staying disciplined in your bidding. There is no substitute for preparation in a hurried situation like this. Preparation takes the doubt and guess work out of the equation.
Your preparation should include a checklist on the possible cost needed to repair the property. But an experienced investor should have no problem estimating the possible cost involved to rehabilitate a property even though they are given a relatively short time to go over the property. Even then, a data on prices should come in handy to estimate the cost correctly.
It is a good idea to put together room packages, that you know the total cost for, and check them off. For example a bathroom remodel package would consist of a tub, toilet, paint, flooring, plumbing, electrical, and everything else that you might need to complete a bathroom. You would know quickly what it would cost to make the bathroom brand new. In a hurried situation an investor could go room to room with a checklist and get a very accurate estimate in a very short period of time.
In summary, being prepared may just be the competitive advantage that makes a good investor great. Checklists speed up time and reduce mistakes that could be made in a hurried situation.
Overbidding for a property is pretty common scene during auctions. This is maybe due to the fact that you're in the room with your competitor and you're constantly judging their reaction to every bid. The feeling of bidding once more to get the property is pretty overwhelming and most of the time you would end up way over your ceiling price.
Another common bidding situation that an investor runs into is the open house "bid taking hour." In a lot of cases like this an agent will be working with a bank or a private owner who is motivated to sell a property that has been badly neglected. Instead of going through a formal process the agent will let a group of investors know about the property then he will arrange a showing over one day period and the following day he will submit the offers to the property owner.
There are instances also that these open houses can span from a day to a whole weekend. And there are even some that only opens for only an hour to show to the investors and that's the span of time for you to make a decision. What I wanted to tell here is that, in these transactions, you have to make a decision quick but accurate.
It is at this point where a good investment plan works in the investors favor. An investment plan is basically doing your homework before you ever get to the auction and staying disciplined in your bidding. There is no substitute for preparation in a hurried situation like this. Preparation takes the doubt and guess work out of the equation.
Your preparation should include a checklist on the possible cost needed to repair the property. But an experienced investor should have no problem estimating the possible cost involved to rehabilitate a property even though they are given a relatively short time to go over the property. Even then, a data on prices should come in handy to estimate the cost correctly.
It is a good idea to put together room packages, that you know the total cost for, and check them off. For example a bathroom remodel package would consist of a tub, toilet, paint, flooring, plumbing, electrical, and everything else that you might need to complete a bathroom. You would know quickly what it would cost to make the bathroom brand new. In a hurried situation an investor could go room to room with a checklist and get a very accurate estimate in a very short period of time.
In summary, being prepared may just be the competitive advantage that makes a good investor great. Checklists speed up time and reduce mistakes that could be made in a hurried situation.
About the Author:
Author Jack Cockrel is a real estate investor based in Atlanta, Georgia. He has made more than 750 real estate transactions since 1996. For Real Estate Investing Tips get his free course Real Estate Investing Free Course. You can get a unique content version of this article from the Uber Article Directory.
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