Why Do You Want to Invest in Real Estate?

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Today we’re going to be discussing investment properties. If you’ve been thinking about investing in real estate yourself, either by renting them out or flipping them, we’ve got some important information for you to absorb today before you get started.

The first thing you need to ask yourself is, “Why am I doing this?” When you’re in the middle of a transaction, you’re going to come across things that make you question what you’re doing. That’s why it’s important to have goals beforehand. The reason I wanted to start investing in real estate was because I wanted to develop passive income to give me the ability to have financial freedom so I can invest in my family when I have the time. Instead of thinking about how you will get a rental property, consider thinking first about why you are going to buy real estate. This will allow you to move forward when things look difficult, by recalling your strong and powerful “why.” Now let's talk about a few actionable steps you can take if you’re looking to buy a fix-and-flip property.

1. Have a clear understanding of the home’s “after-repair value.” 
2. Have a clear understanding of what the market conditions are like around the property.  
3. Have a clear understanding of exactly how much repairs will cost.

One helpful way to avoid many of these mistakes is by hiring an expert real estate agent. It’s a huge advantage because you can learn and grow from the mistakes or successes they’ve had previously, without having to make any mistakes yourself.

Another reason you need to hire an expert to help you with buying an investment property is that they are tuned into the market. They can let you know exactly what you can rent or sell the property for. They can also help you determine your cap rate. The cap rate is found by taking your purchase price and dividing that by your net annual operating income. Cash flows will be harder and more lucrative in “C neighborhoods” or entry-level neighborhoods. When market shifts occur, these neighborhoods will always be the ones to get hardest. So keep that in mind when investing as well. 

 
If you have any questions for me or are looking to invest in real estate yourself, give us a call or send us an email. We would love to hear from you.

Should You Accept the First Offer You Receive on Your Denver Home?

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In a strong seller's market, there are two different types of exposure. One has to do with marketing and the other has to do with time. We'll dive into both of these to ensure you understand the best strategies you can put in place to make sure you get the most amount of money for your home with the least amount of stress.

We put a home on the market Thursday of last week. We had 10 showings and two contracts the first day. Both the buyers who submitted an offer tried to pressure us into accepting it within 24 hours. We decided to let the property sit on the market for the entire weekend, which resulted in a total of nine contracts and even some cash offers. The seller was able to leverage all of these buyers against each other and get the best possible offer.

If we would have done this the old school way and accepted the first offer, the seller would have lost out on $11,000 and the chance to rent back the property, which turned out to be a huge bonus for this particular seller. This allowed them to buy their next home while living in their current home after they had closed.

Marketing is also extremely important, even in a strong seller’s market. If we can draw a lot of people into your home in the first couple of days that it’s on the market, we’re going to have a better chance of getting these people to bid against each other. This results in more money in your pocket, better terms, and your choice of financing.

If you have any questions about how our team can use time and marketing to get the best possible results when selling your Denver home, please don’t hesitate to reach out to us. We would love to help you take advantage of this strong market! 

Hire the Right Denver Real Estate Agent

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Are all real estate agents equal? The answer is no. It’s important to interview more than one real estate agent. Today, I want to share some good questions you should be asking a real estate broker before you hire them.

1. Do you work with a team or are you an independent agent? If you work with a solo real estate broker, there’s a high chance they will have a conflict in their schedule when you’re looking at homes. Homes are selling incredibly fast in today’s market, so missing a showing could mean missing out on your dream home. With my team, you have 6 agents available to show you a home whenever you want.


2. How many properties have you sold in the last 12 months? Here in Denver, there are 16,000 licensed agents, and 8,000 of them have never sold a home. The average real estate broker should sell at least four homes a year. When you hire an agent, you’re getting more than their experience; you’re also getting their connections. An experienced agent who sells more than 4 homes a year will know inspectors, title company reps, structural engineers, and attorneys. The more sales an agent has, the better he or she can navigate tricky transactions.


3. Can you provide me with references or testimonials from previous clients? Is there a website where you can see that past clients had good experiences with this agent? You also need to look for recent testimonials. It doesn’t matter if a client had a good experience with this agent 15 years ago.


4. Follow your gut. Work with the person you think understands your needs best and will work on your behalf to accomplish your goals.

If you have any questions, give us a call or send us an email. My team and I would be happy to help you!