• Michele Wood

Building Wealth Through Real Estate Part 2

Updated: Sep 24, 2021

In my last blog, I went over goals on building wealth through home ownership by concentrating on property location. This week I will continue to concentrate on how to make easy returns on your home investment by focusing on a couple of key strategies.

If you are buying a primary or secondary home with the intention to keep it long term, do not look for a distressed property that you are willing to fix up. Instead find distressed owners that need to sell. Distressed owners usually need to sell fast and they are looking for escrow that will be faster than 30 days. If you offer them a 21 day escrow, they will be more willing to sell to you than another buyer. Many times, these sellers are either carrying two mortgages, lost their job or income is tight. The faster they sell a property, the less money they will lose. Some sellers are also purchasing a new home and that sale is contingent on selling their existing home. Allowing these sellers to rent back their home for a certain amount of time is also very attractive to them.

If you are thinking about flipping houses, do not start with a distressed property that is in need of renovation. It is very difficult in this market to find a contractor and the costs usually run higher that a novice flipper can handle. Look for properties that need cosmetic work (this is work that a handyman can do). The best strategy for flipping a house is to hire a professional stager. Stagers can be extremely cost affective while adding 8-20% to your selling profit.

There are two keys to keeping your home investment yielding high returns. The first key is to avoid putting more money into your property than what you will get out of it when you go to sell (in the short or long term). The second key is to look for homes that do not need renovation. This means looking for distressed owners and not distressed properties.

Be on the lookout for Building Wealth Part 3 for more strategies on using your real estate for your future investment goals.

Michele Wood

CalBre #01921342

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