Investment Plan: Real Estate Investors Power Tool During Auctions
Jacques Coquerel
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.
The scene in which an investor exceeds his maximum price for a property is common during auction. When you see other bidders react to every bid, you'd be teased to make one more bid and then another. And before you know it, the bid stops with you and you're way over your budget for that property.
Investors could also be faced with an open house "bid taking hour" situation. This usually happens when banks or individuals desperately want to sell a neglected property perhaps and they resort to agents to do the job for them. With such short selling time required, agents often resort to a single day open house to showcase the property to a group of investors so that the following day will be the submission of offers to the property owner.
This open house period could range from a day to a weekend. One house that I bought actually had a one hour showing, and that was all there was going to be for that property. The point here is that the offer has to be fast and accurate on the part of the investor.
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 thorough preparation checklists should have data on prices of all possible repairs for that particular property. A seasoned investor is able to estimate the cost needed to rehabilitate or repair a house in practically a short inspection time. A background on prices, however, is essential to estimate the cost as accurately as possible.
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.
At the end of the day, preparation gives investors a competitive advantage over other investors and that's what makes them exceptional investors. In a hurried situation, your checklist helps you avoid making mistakes and it could also cut the inspection time needed.
About the author: Jack Cockrel is a real estate investor based in Atlanta, Georgia. He has made more than 750 real estate transactions since 1996. For
http://www.getquantumleap.com/) Real Estate Investing Tips get his free course
http://www.getquantumleap.com/) Real Estate Investing Free Course.
