If only we could get paid a nickel every time someone said that... we'd be doing pretty well. Although most real estate investors say this with a negative connotation, we'd like to point out that there is a huge advantage to this:
Property owners are more willing to sell than ever.
As a real estate investor, this should excite you. More homes & properties for sale means more options. If one house doesn't fit your strategy, acknowledge it and move on to the next house. The downside is that property owners naturally want more for their properties, sometimes too much. Ambitious real estate agents sometimes create false expectations on what a house may sell for in hopes of a higher commission.
So what does a real estate investor do when it appears that the margins are shrinking by the day?
Easy. Get creative.
Here are 3 ways to get creative and increase profits:
Visit with your city's office and ask about exemptions or ways to maximize the use of your investment property. We watch builders do this all the time: porch exemptions, variances, attic exemptions, roof top exemptions etc etc. If you know how to find the right people and ask questions, it takes very minimal effort to increase profits 15% or more
Leverage. This is one of the most important actions you can take in almost an endeavor in life. Leveraging money can allow you to take on several projects at a time. Leveraging people can increase efficiency and reduce turnarounds times on investment properties, ultimately decreasing holding or financing costs. Leveraging systems and tools, can help you reduce risk, eliminate mistakes, and increase your proficiency.
Maximize your floor space (livable square footage) Although we touched on this in the first point, it's important to always be on the lookout for this. Below is a property that we currently have available and is a great example of how to add additional square footage with minimal effort. The house is right under 700 sqft BUT there is a house that recently sold, one block down, that is 1200+ sqft. In this instance, an investor could dramatically increase their end Sale Price by doing a 360 sqft addition. This particular house has a 36' x 10' enclosed back porch that shares a wall with the kitchen and one of the bedrooms, making this almost PERFECT for an addition with minimal costs.
Here are some details:
2730 W 12th Dallas, TX 75211 690 Sq ft - 2 bedroom 2 bath AVAILABLE $75,000
This Oak Cliff home is currently occupied by the seller. 2 of the rooms have a nice finish out but the bathrooms and the kitchens will need a full update. Add on to this home for to create a desirable, open floor plan.
Contact Chuck Taylor
for more information at 214-693-4941
More about the property:
690 sqft Remodel/addition (taxes show 452 sqft, appraisal has been ordered for confirmation)
2/2 built in 1950 (rebuilt in 1989 due to fire)
7500 sqft Lot
Zoning - CD 8 (sub area 1)
Full remodel - needs foundation work (pier & beam), bathroom updates, kitchen updates, and addition
HVAC installed in 2010
10x36 back porch can be converted to create an additional bedroom and add to the kitchen (numbers below reflect this conversion - 360 sqft to enclose and finish out)