Recently I was talking with a new investor as he told me about a property he recently purchased. Before I get into that let me give you a little background.
New Investor on the Property Prowl
We will call him Sam for the purposes of this post. Sam started looking at single family homes and duplexes in a new market about 7 months ago.
He went looking at 4-6 properties a week for several months, made offers on maybe 10% or so of them and had not gone under contract for one yet.
A few months ago that changed….
“Got one to get one”
Sam ended up grabbing a single family home. It was a foreclosure that he had looked at weeks earlier and vaguely remembered the details on.
On top of that it was covered in snow because it was winter time, meaning he had no idea what the status of the yard was, what was going on with the space beneath the deck that was attached to the house or what the foundation looked like on the back of the house.
That is a lot of “what-ifs” to deal with. We are talking anything from the worst case of foundation issues to the best case of just having to excavate the yard.
It turned out to be many of those things. The back side of the foundation was not structural sound. The deck attached to the house was crumbling amongst several other items that have blown his budget well past estimates.
This isn’t to say you should not buy properties during the winter, but you still need to perform due diligence. Going back with a shovel or snowblower to look at this house again before submitting an offer would have likely got it done in this example.
When I asked Sam why decided to buy the property he responded: “Got one to get one.”
Stay Diligent and Stay Focused
I understand after looking at properties for a few months and not having offers accepted you can get impatient. As a new investor especially, you just want to get the ball rolling.
However, impatience isn’t your friend when buying investment real estate. Like I always say the goal is to “buy right” which is why running numbers through a property calculator is important.
There is a general saying in real estate investing: “You look at 100, offer on 10 and get 1.”
That statement may be a bit extreme, but that is the mindset to have.