Could you be getting paid too little for your real estate investing efforts?
Why is it that some magazines sell for $1 and others hundreds? Why can you find such incredible outsourced freelancers for so little? And why is it that some real estate investors make so much more money flipping houses than others?
Currently, some real estate investors are making $10,000 to $100,000 (or more) for flipping contracts, while others are making a few hundred or a couple thousand as a contract assignment fee.
In some cases, the issue is that those new to real estate investing just don’t realize how much there is to be made, and in the wake of the economic crisis and job market flop, many are selling themselves short.
Other causes could be issues with branding or perceived value, and when it comes down to flipping houses the market restrictions on limitation on values still play a part, but there is a lot of leeway.
If others aren’t balking at your fees and spreads, odds are you aren’t asking enough. You want to be at a point where properties and contracts are turned around in a reasonable amount of time with occasional resistance or negotiation.
Not sure if you are asking enough? Try adding 10% to what you are doing now; from assignment fees, to the spreads you are demanding, to rent and other fees. If that comes easy, then consider continually adding another 10% until you start hitting too much resistance (costing you deals or too much hold time).
Alternatively, ask yourself what you can do to increase the real value of your real estate investment services regardless of the value of the property or product. Evaluate your positioning and branding. Or look for other services you can bundle together to raise the per-deal profits such as mortgages, title, insurance and property management. Some investors are adding $12-15k on top as consulting fees for finding rentals.