If you’re in a position to invest in today’s real estate market, you may be able to take advantage of some once-in-a-lifetime deals. All investment comes with risk, however, and this is no time to ignore warning signs of deals that can sour quickly. Keep these guidelines in mind when considering your potential investments:
Rise above the times. Investors who are able to navigate tough times such as these and still come out ahead are in the best position for long-term success due to a consistently strong track record.
Do your homework. If you’re selling, be sure to pre-qualify buyers to avoid a deal falling through because of inadequate financing. Avoid unpleasant surprises by knowing exactly who and what you’re dealing with—spend the necessary time and energy to perform thorough due diligence.
Seek out alternative and flexible lending. Cash is always most desirable and gives you the greatest negotiation leverage. If possible, generate private money and financing solutions in order to avoid traditional, now stricter, lending.
Don’t settle. In a buyer’s market, savvy investors are wise to generate as many prospects as possible and select from among the best. Establish criteria for your goals and don’t compromise. If a real estate deal doesn’t meet your standards, move on to the next one.
Plan your exit strategy and have more than one. Contingency planning and multiple exit plans are essential to mitigating risk. Always have more than one backup plan, and be ready for worst case scenarios. Ample equity and cash flow are essential.