4 Tips from the Real Estate Trenches

In the beginning of my real estate career, I bought 2 properties in one year. My first property was a duplex followed by the second property that was a 4plex. I would like to share with you how they were completely opposite of each other as far as deals go, even though I got a great price for both of them. You see, my first deal was the duplex and it was fairly easy to purchase, no real rehab needed, the property came with tenants in place and immediate cash flow. My next purchase was a 4plex that was gutted and needed quite a bit of work. Yet, I used the same mentality with both purchases and made a few mistakes along the way. Here are my tips for you so you can avoid this kind of a situation altogether.

Tip #1 is there are no 2 deals that are the same. There is always something that will be different. In this case the difference was like night and day or like comparing apples to oranges. As you can see from the above, the duplex was a turn key property already producing income. My 4plex needed a major rehab and time to even get it to the point of where my duplex was. You can see right away, these 2 properties were not on the same level and should not have been thought of as similar.

Since I was new to the real estate world, I did not think I needed a contractor to take a look at the 4plex and see what really needed to be done. I literally bought "as is" with no due diligence on my part what so ever. So, this would be Tip #2, always do your due diligence no matter what. I made a huge mistake by not doing my due diligence and it cost me a lot of money and also time. If you have a set amount of money that you are dealing with like I did, you will want to make sure you look into the property and do your proper research.

Tip #3 has to do with staying paralyzed in fear and getting nothing done. When I ran out of money, I stopped everything and the building sat. I had one apartment rented out but desperately needed to re-finance because I did this deal originally all cash. So, I needed to refinance because that was a way to get the cash I needed to finish the job. Actually my mentor snapped me out of my paralysis by telling me to get going, refinance and get it moving. That is exactly what I needed to hear and actually everything fell into place, once I got it going.

Tip #4 is not to get caught up in hiring cheap labor. This cost me so much down time than if I would of hired a regular contractor. I went through several groups of people saying they were handymen. It was also something that tied up a lot more time than needed to be. In the end, I hired a general contractor and got it done within a few months time. Huge difference. I was trying to save money and in the long run, I believe I did just the opposite. It certainly delayed the income from coming in.

I hope these tips will help you in your future investments in real estate. I was trying to take action and make it happen. At least I got it going, but there are easier ways. Take these lessons that I learned and implement by taking the proper action.

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