Price IS Everything
As a full-time Canadian real estate investor, we must be able to attract deals to us which create massive and passive income on a regular basis. We of course have to be very cognizant of what we pay for each property, whether we are looking to purchase it ourselves or utilize it for the purpose of an assignment . We must be able to negotiate specific and necessary terms into each and every deal.
To Buy or flip?
Price is obviously a very important bargaining tool, although it does not have to be the only thing, as outlined in a previous article. Where price means everything is in situations where you are looking to either put money into the property, or flip the property to another investor via an assignment.
Obviously, if you are putting money into a property that requires repairs, or if you are simply purchasing for the purpose of doing a renovation and flipping it, obviously price is key.
When we put our own money into a property, we must consider all renovation and closing costs, down-payment, utility costs, property taxes, potential mortgage fees, and the various number of other carrying costs that go into the ownership of the property.
We must be able to determine what we can sell this property for, working our way backwards in our calculations by subtracting our previous numbers from our bottom line fire sale price in order to see if we can make money on the deal.
We must not only have a true value of the property once fixed up (after repair value), but the ability to sell that property for less than fair market value in order to create a very, very quick sale.
Should we assign the property?
The other place where price is everything comes when you are looking to assign a property. (This was outlined in a previous article) When we “flip” the contract to an investor, we must negotiate the price to be able to leave enough money in the deal whereby the other investor can make the lion’s share of the profit on that deal utilizing whatever exit strategy is appropriate, and be able to pay us, the investor, for finding the deal and assigning it.
In the assignment strategy, it is important as the knowledgeable real estate investor to be able to suggest the best exit strategy for the incoming investor taking the deal. Upon contacted the potential investor in the first place, you should create an outline on a spread sheet of all the numbers showing the expenses, profits and projected time lines.
Canadian Wealth Builders offers many unique, practical, "out of the box" real estate investor trainings which offers the student hands on, in the trenches style instruction to facilitate both a different mindset as well as a successful and lucrative real estate investment business. To find out more, please go to www.canadianwealthbuilders.com
Your success is our business!
Website: www.WorldWealthBuilders.com/live.html | www.preigCanada.com/membership
Newsletter: Subscribe REI Club Membership | Apprenticeship | LIVE Training
Blog | Facebook | LinkedIn | Google+ | Twitter