The purpose of a business is to create and keep a customer. Consequently, the most important aspects of business are marketing and innovation. To achieve your financial goals, your business must be centred on the customer. In this article, we will explain how you can grow your real estate business by addressing common customer needs.
Buy, Fix and Flip
Flipping, the art of buying underdeveloped property, fixing it up and selling it, is one of the most common business models in real estate. Its success hinges on being able to anticipate customer needs and seeing how an underdeveloped property can meet those needs if it is fixed. Real estate agents often flip houses themselves, or help their clients flip houses.
Despite the widespread idea that you can make $100,000 or something by flipping properties, the margins are actually quite small. Real estate agent Mark Ferguson, encourages real estate agents to think in terms of a series of investments, each with a small payout. The sum of those payouts can add up to a pretty impressive number. The idea is not to try and get rich with one property. That is highly unlikely to happen.
Furthermore, nobody is infallible and it just might happen that you do not correctly anticipate the market’s needs. Consequently, you could end up with a property which, even if you thought you bought it at a discount to its intrinsic value, is hard to sell. You may even find that the costs run away from you and you struggle to break-even. So, you have to spread your bets.
One place to find undervalued properties is the foreclosure market. Through MLS , you can search local foreclosures of houses. Remember, you aren’t the only one in the market so even on the foreclosure market, you might find that competition pushes the price up.
It’s important to correctly estimate your After Repair Value (ARV). You could consult a real estate agent, or, compare the values of houses in the neighborhood you are looking at repairing a house in.
Fixing houses isn’t the only way to make money. ANother way is to buy property wholesale and quickly sell it off. JB House Investor believes that this approach can generate between $5,000 and $10,000 per deal.
Look for Undiscovered Gems
In the real estate market, it’s important to be first. Whether you’re looking for land for business or a house to fix and flip, you need to be the first mover if you are to have any chance of buying properties at reasonable prices. The moment you face competition, you lose control of valuations.
Give yourself an edge by looking beyond Zillow or MLS. Off-market properties are the hard to find properties that are hidden gems. There are many reasons why a property may be off-market. Typically, the owners cannot sell the property through the market and are looking for a speedy resolution. For instance, a divorcing couple may be in a hurry to liquidate their assets. The key to success is networking and going to auctions or auction sites such as Auction.com.