How To Buy Houses Low In Real Estate Investing

One of the most common expressions in real estate investing is buy low, sell high.   As simple as it may sound, it is not always easy to buy houses at the right price.

 Whether you plan to sell your houses immediately or keep them for cash flow, your buying price must be low enough to make you profits.

 So how do you get the best buying price when buying your properties?

 Until recently, the market supported buying houses as high as 80 cents on the dollar.  After all house prices always went up even within a few months.

 Currently, when you buy a house, you should expect the price to go down.  Almost everyone who owns a house for a year or more has lost equity in it within that time.

 You have to consider this loss when you buy a house.  Today, wholesale properties go for 60 to 65 cents on the dollar minus repairs.

 Also, tenants have become more choosy since there are more houses to chose from, and are likely to go for a house with a pristine rehab job.

Rental prices are also competitive due to this fact.

 When you are buying houses, it is necessary to make sure you let the seller know these facts.

So whenever I am talking to a seller, I let them know that even though it seems to them like they are leaving a lot of money on the table, I have to spend my time and money fixing it up, then I have to sell at a deep discount.

 And probably I'll not be able to sell it at all!

I let them know that it might take months before I can sell it in which time most of my profits will be gone.   Almost all seller relax when they understand these facts.

 I make sure I make this clear before I make any offer.  Even though motivated sellers really need to sell their houses, they do not like to feel like they are being taken advantage of.

Once they understand the current market conditions, then I can make my offer - and it offer does not look too low-ball and the seller is likely to accept it.

Why do you need to explain all this?

 Since you have to sell houses lower than we used to a few years ago, you must buy them lower to make money.

 If you buy properties on terms such as lease options, it is also necessary to do this.  Your buying price must be low enough to cover the facts above even when you buy properties on terms.

 This way, you can still sell it at a profit in a year or two even if the market remains poor.