Making mistakes in real estate investing

I found that the key mistake I see and have made is being emotional about your decision making on a transaction. I talked to a potential client last week and he had done just that. He had bought a condo in Tempe close to ASU (that's a great location). Where I think he made a bad decision is that he bought this while out of state. He thought he'd purchased a condo from a trustee auction. What had actually happened he'd purchased a wholesale condo for $65,000 and the fix up (for flipping it) was $3,000. The $3,000 would be a flag to me, if your flipping then you need to make sure that you have a pristine remodel. The realtor that sold it did not disclose that her client or her had purchased the condo for $42,000. Another huge flag, for just a $3,000 remodeled they could have sold it for supposedly higher than $65,000. The condo had another big problem was that the unit was a 1 bedroom and 1 bath. That shrinks your market considerably, basically 1 or 2 people can live there that's it. You also have a lot of apartments your competing with in that area. He had voiced concern on the rehad and said he didn't think it was up to par. Understanding how to do these transactions is very important to your wallet. What he should have done is get comps first. Look at the value and days on market. He should have detailed the rehab and make sure that everything that needed to be done was getting done. I would have also liked some kind of time line on the rehabbing. Then I would have checked the people telling me to buy and make sure that they done this successfully before. When you hire a coach you want to check out their resume before you hire them. I sincerely hope this gentleman makes money on this transaction, but doing your homework before hand and having the right team around you is crucial.

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Brett young
Valley Realty
Owner/ CEO Roof Top Investment
Real Estate Investment
http://www.rooftopprofitmax.com/