You see the ads on TV or on the local radio station. Often, they are offering free seminars to get you started and help you become a successful real estate investors. You probably also see advertisements to buy houses with headlines like “We Buy Houses in Richmond, VA” or “Sell Your House Fast in Richmond” from real estate investors. With all of this activity, you start to wonder if you should begin investing in real estate. Is it the fear of making mistakes that is holding you back?
Making mistakes is how we learn. Making mistakes is what helps us grow. Every great investor has made a mistake or two (or more!) along the way. It is nothing to be embarrassed about or try to cover up. It is a part of the business, and it happens to everyone. You have probably heard many stories about successful business people and how many mistakes they made before succeeding. And it is not just in business. Almost everything we do, not matter how small or how big will result in mistakes. If you are not making mistakes, you probably are not growing.
Below, we offer up some of the most common mistakes we see from new real estate investors, and what you can do to avoid them.
Mistake #1: Paying Too Much for a Property
Nothing ruins the excitement of buying an investment property faster than a case of buyer’s remorse. This mistake can be made for lots of reasons and often, many of them could have been avoid. While we know that that mistakes can be made, we want them to be from taking smart risks. That moment when you realize you have paid way too much for the property and likely won’t generate much of a profit on the home when you resell or try to rent. Before making a purchase, real estate investors should carefully run all of the numbers.
- Factor in financing costs
- Repair costs
- Holding costs
- Potential resale value
- Average rents in the area
- Listing fees
- Agent fees
- Tax and insurance liabilities
While you don’t want to hesitate when a great property hits the market, you also will not want to be too impulsive, buying something that isn’t right for you. Running the numbers with a professional beforehand can save you a lot of time, stress, and money. You want to make sure your purchase decisions relay on good reliable data and not emotion. Working with RVA Home Buyers can ensure you find the best properties at prices that will help you build your portfolio. You won’t have to worry about any surprises, red tape, or even worse losing money.
Mistake #2: Not Accurately Estimating Repairs
Avoid making Mistake #2: Not Accurately Estimating Repairs. When buying investment properties in Richmond, you’ll often find that many are older and in need of some work. Before buying a house, you’ll want to estimate your repair costs, taking into consideration you final goal for the property. Often, there are many different scenarios that can all be successful. Are you flipping the property or looking for tenants to move in? Either way, you will want to make some repairs, which should be accounted for before buying. Repair costs can be high, and add up fast. Therefore, you should estimate for unknown or surprise costs, which you will get better as you gain experience. In many cases, it pays to do the repairs yourself as long as you know what you’re doing and have the time. Be sure to pad your repair estimate a bit too as repair costs typically tend to be more than you may think. Don’t get stuck in over your head. RVA Home Buyers can help you accurately estimate the repairs on a property before you make the purchase. We have a very repeatable and accurate method for estimating repairs for investment opportunities.
Mistake #3: Not Doing Their Homework
While getting into real estate can be very exciting, it also requires some research and due diligence. An agent, a buyer, or RVA Home Buyers, can give you the facts on a property, but there is often more to learn. How about the neighborhood. Make it a point to learn about the community, commute times, HOA fees, or anything else that will potentially impact someone living in the home. Remember that some properties look good on paper, but there can be more to the story behind the scenes. At RVA Home Buyers, we make it a point to learn about all of the details of a property before selling to another investor. When making such a large and important purchase, be sure to make yourself as informed as possible. Learn more about Mistake #3: Not Doing Their Homework.
Mistake #4: Not Being Able to Find Tenants or a Buyer
This can be very costly: Mistake #4: Not Being Able to Find Tenants or a Buyer. Almost as bad as overpaying, is buying a property and having it sit there empty. You’re paying the bills, taxes, mortgage, and insurance costs, while the property doesn’t provide you with any income whatsoever. You can quickly become a motivated seller yourself. Before buying an investment property in Richmond, make sure that it is in demand. Whether flipping or renting, you’ll need to find buyers or tenants to make the deal worth your time. Take a look at the properties for rent or for sale in your area and see how yours aligns with the needs. Will you be able to make a profit when all is said and done? When working with RVA Home Buyers, we’ll pull the data you need so you can be certain you are making a profitable investment. We are a local investor with over 20 years of local investment knowledge in Richmond, VA.
Mistake #5: Trying to do it All on Their Own
Any successful investor knows that they can’t do it without an incredible team by their side. This includes agents, buyers, wholesalers, a title company, legal team, construction crews, and more. Trying to do it all on your own will end up wasting your time and costing you money. While doing some things on your own, a savvy investor knows when to call in for back up.
Working With RVA Home Buyers
At RVA Home Buyers, we serve both buyers and sellers throughout the Richmond area. While we help property owners find solutions for difficult situations, we also help investors by sourcing the best properties. Whether you have never purchased a property before or if you are a seasoned investor, our team is here for you. We can help you avoid many of the mistakes investors often make, while helping you to find the best properties for sale in Richmond. Give us a call today to learn more about us and what we can offer you!
Call us at (804) 420-8515