Real Estate Investment Hats

When in real estate, a person wears many hats and learns to adapt to a ton of situations. This mean, however, you must be knowledgeable enough to do so. You may be a buyer’s representative, seller’s representative, wholesaler, investor, contractor, mediator, property manager; the list goes on and on. The only thing that remains constant is you. One may argue that you can delegate these tasks out to a “specialist;” but, how do you know if the “specialist” is any good if you are not capable enough to evaluate their work? In other words, if you know and understand what the specialist does you can save thousands of dollars per transaction.

When wearing this many hats one cannot become a master of all. Therefore, focus on those positions that can save and/or make you the most profit. An easier position to understand and translate into savings fast is the contractor hat. This does not mean you have to pick up a hammer or paint brush. What this means is, know how much the nails and paint cost, what amount of each is required for the job and the estimated amount of time the project will take to complete. Knowing this information can save you money in three different ways. First, it can save you from contracting a property with hidden issues if you know what to look for during your initial walk through. Secondly, you can use this wisdom in negotiating with a seller. A perfect example was when I was dealing with a seller selling an older home. To most people the siding looked in great shape because it had newer vinyl siding. This neighborhood called for hardie siding so it needed to be replaced. I knew that these homes were originally sometimes built with asbestos siding, which increases the renovation cost quite a bit, and this house had asbestos. I informed the seller of this problem and, of course, they called around to see if I knew what I was talking about. I informed them that now that they knew of this they had to disclose it to any potential buyers. They called me back and accepted my offer because most of the other buyers did not want to bother with the asbestos issue. If one of the other investors/wholesalers had closed on this property, they would have killed their renovation budget or their investor’s budget by a few thousand dollars. Third, once you have the home, you have an idea about what it takes to complete a project and can negotiate the prices with the contractors. This will help prevent being taken advantage of by an unethical contractor.

If you are serious about being involved in real estate investments you need to continue developing your craft similar to any other professional in real estate. Nearly every person in real estate is required to take continuing education including real estate agents, loan officers, inspectors, attorneys, etc. This is required because real estate is ever changing. This should make you want to continue your education and not be left behind. Sooner or later you may become the “specialist” and deals will begin finding you instead of you having to hunt down deals.