INVESTMENT STRATEGY
TIGHT MARKETS
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How to Be a Smart Real Estate Investor in a Tight Market THESE ARE THE FOUR KEYS FOR KNOWING HOW, WHEN, AND WHERE TO INVEST.
by John V. Santilli
s you search for new property in a tight real estate market, there’s often no room for negotiation or an opportunity for substantial ROI. In today’s economy, limited real estate availability and rising inflation often result in new requirements for proof of liquidity. In the short term, uncovering higher prices in untapped real estate locations can offer more opportunity for a buy- and-hold investor and more value in the long run. So, what’s the most intelli- gent approach for your next real estate investment? Here are some considerations. A
NO. 1 Preserve Your Cash When making an offer, investors should never forget cash is king. But sometimes, it can be a challenge to manage your money thoughtfully on a fix-and-flip venture. What’s this mean for you? Don’t pursue over-improvements and renovations based on your tastes; instead, focus on making the prop- erty attractive enough for when you decide to flip. You certainly don’t want to lose out on a buyer because you overindulged on the back- splash or installed a lap pool in an already-finished basement.
NO. 2 Establish a Budget — and an Out — Before You Start Key to your success is establishing rehab guidelines before starting your project. Having a detailed plan to follow for all improvement work on a property will keep you within your budget. More important, this pre-planning will ensure you main- tain your profit margins and help you cope with any unforeseen issues during the project. Whether you’re leaning toward flipping versus renting the property, make sure you know your margins ahead of time and know when it’s
8 | think realty magazine :: march – april 2023
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