Do your goals dictate what kinds of properties you buy or does the property impact your goals? This is a question that most new investors have a very difficult time answering. On one hand, deals may be pretty scarce so they are not in a position to turn any deals away. On the other hand, if they stick with deals that only fit specific buying criteria they are more likely to get involved in deals that make sense and are profitable. Before you look at any real estate, you need to determine exactly what you are looking for out of your investment.
Are you looking for a quick flip or something you can hold on to for at least a few years? Are you looking to wholesale this property and move on to the next one? Are you looking to hit a home run or are you willing to make a small profit? These are just some of the questions you need to ask yourself before you get started. These goals and objectives will steer you to your properties. If you just look to go from deal to deal without a real plan, you will end up with a portfolio that may leave you with your hands tied if a deal you really want comes your way.
Once you determine your goals, you can work on specific property strategy and location. You may want to buy only turnkey properties in urban neighborhoods, but that may not be a realistic option. Conversely, you may have a tough time finding properties you can get at a discount and do work on in affluent areas. This isn’t to say they are not available, but depending on your target area there may be half a dozen or more investors with the same strategy looking at the same properties.
After you determine your goals and strategy, look to see if that lines up with where you want to invest. You may have a great plan, but if there is minimal inventory where you are looking to invest, you will need to change gears. You can either broaden you investing area or adapt to what is in your local market. What you should never do is take a deal that you aren’t fully committed to regardless of where it is. This will create a domino effect that will have you looking to get out before you even get in.
There is a lot more that goes into real estate investing than just calling your local realtor and asking them if they have anything available. Sure, you may get lucky on a property or two throughout the year, but if you are looking for a sustainable business you need to take the time and map out your goals & strategies. Each property and deal is different and can yield completely different results. If you know what you want out of your investment, it will guide you in every decision you make from the time you submit an offer until the time you transfer the deed.