What is an Appraisal?

April 20, 2016 by Lacie Leave a Comment

What is an Appraisal?

An appraisal is a document that shows an opinion of how much something is worth. It could be fine jewelry, art, or in our case, a property. The appraisal gives you useful information about the property. It describes what makes it valuable and may show how it compares to other properties in the neighborhood. An appraisal helps assure you and your lender that the value of the property is not just the seller’s (or owner’s in the case of a home equity loan or refinance) opinion, but is based on an expert’s assessment.

Here’s the thing though, appraisals are still based on an opinion, it’s just the opinion of a third party and not the seller. This means that an appraisal can vary widely from one appraiser to another. There are also things that you can do (legally!) that will improve your chances of getting a good appraisal. I’ll be covering that here on the site at length, as most people are not aware of the process and the things that can be done, but first let’s talk about why you might need an appraisal in the first place.

Reasons You Need an Appraisal

Typically, you will need to have an appraisal when you are doing any of the following:

Buying a new home
Refinancing a home you already have
Applying for a home equity line of credit or home equity loan

Who Pays

In my experience, the home buyer will usually have to foot the bill for an appraisal. You are entitled to receive a copy of appraisals, and in my opinion YOU SHOULD ALWAYS GET A COPY FOR YOUR RECORDS. You should receive them soon after they are delivered to the lender in complete form—no later than three days before closing.

You can’t be charged a fee for copies of an appraisal or other valuation. But you can be charged a reasonable fee for the lender’s cost of preparing the appraisal or other valuation.

The average cost of an appraisal is $300-400, but it does vary by state.

In the coming weeks, I’ll be covering the appraisal timeline, and things that you can do to give you the best chance of having a good appraisal!

Where Should I Advertise My Rental?

April 2, 2016 by Lacie Leave a Comment

For most people, the most challenging part of owning a rental property is finding great tenants. It can seem overwhelming and I find that people are not even sure where to begin.

There are many places where you can advertise your rental property:

Sign on the Lawn: This is what most “old school” landlords do, and it’s as simple as it sounds. You grab a “For Rent” sign, write in your phone number, and place the sign on the lawn in front of the property. This is relatively easy to implement and is also very cheap. However, you are not exposing your property to a very wide audience this way. People will not know your place is for rent, unless they happen to drive by it. I’ve seen mixed results with this method, and I think there are some better options out there.
Local Newspaper: Surprisingly, many people still look in the local newspaper to find a rental. You get more exposure than putting a sign on the lawn, but not as much as online options. This option is also the most expensive, and it’s not uncommon to pay up to $100 a week just to advertise your property. These costs can add up quickly. One thing that you may not know is that often there is an online only advertising option that can be very low cost (often free). The online only option can be a great way to give more information about your property and you can often include pictures.
Zillow: This is a great way to get your property exposed to a wide audience…for free! We love using Zillow because we can put a great description of our rental and include as many photos as we want. People can search for our rental, even if they don’t currently live in the area. Our Zillow ad can also be posted on other sites, which ensures that we are getting seen by as many people as possible.
Facebook Groups: There are Facebook groups for almost every interest, including people looking for rentals. To find one for your area, you can type in “city or county name for rent” into the group search option on Facebook to see if there are any rental groups for your area. We live in a small town but have a very active Facebook rental group for the area. The best part about this option, is that it is of course, free. You are also able to browse through the profiles of those who inquire about your rental, which is a quick and easy way to see if a potential tenant might be a good fit for your property.
Craigslist: Surely everyone knows about Craigslist. It has many of the benefits of advertising in a Facebook Group. However, there are more negatives to Craigslist, since there tends to be quite a few spammers on there. I think the response you will get, really depends on the area you live in, as I know some people have had great success using Craigslist to find potential tenants.
Large Local Businesses: We have a large hospital in our area as well as a college, so we have found that a great way to find renters is to let the hiring managers of large local businesses know the type of rentals that we own. When they are hiring new people, they have our information that they can give to people relocating to the area, and we get quite a few people who call to see if we have anything available. Sometimes, we don’t have anything available, but there have been times where we have something coming up that we haven’t had a chance to advertise through our normal routes, and we have a renter secured before we have had a chance to get the word out. We have a lot of success renting through these channels, as we have found that these people are moving to our area because they already have secured a job, and the company has done much of the hard work of screening the candidate for us.

For our rentals, we use a combination of a few of the above methods. We will typically take many pictures of a property and include that information in a Zillow ad. Then, we can use the Zillow ad to post to local Facebook For Rent Groups. We will also post an ad to the local papers online section only (which is free), and include pictures there as well. We have built relationships with a few local businesses over the years, and get some referrals from them as well. Hopefully, these tips will help you find some great rental candidates for almost no money!

Can I Invest in Real Estate and Still Have a Full Time Job?

September 28, 2015 by Lacie

The short answer is yes, now, for the long answer. You can definitely invest in real estate if you have a full time day job; in fact there are many ways that your day job can benefit your real estate investment.

How a Day Job Can Help You Invest

The most obvious reason why it can be a good idea to have a day job is that you can still pay your bills. You won’t need to rely on putting food on the table from real estate because your job pays for your day to day expenses. There is a reason why it’s called real estate INVESTMENT, it’s because you should look at it as a way to build wealth and financial security for your FUTURE.

It is also so much easier to obtain a traditional bank loan if you have a day job. The thing that most of these real estate investment gurus don’t tell you is that a bank wants to see that you have a steady reliable way to pay them back for the loan you take out with them. It is extremely difficult to prove that you can pay back a loan for a property investment if you don’t have a day job. This is why there are “private money lenders” that will lend you money for you to purchase investment property, but usually charge much more than a traditional bank. It’s a risk for the bank. Having a day job can be a great tool to obtain bank loans on investment property, build up an income, and then quit your job.

Not only should you be able to pay your bills, but with a day job, you should have more money to invest in property. While working a traditional job, you can save up extra money for a down payment on your first property. Once you have a couple properties, it is easy to pull money out of a previous deal to help finance the cost of the next deal, but until then, you need some cash to get started. A day job can give you the money you need.

One of the main benefits of having a day job is that you can afford to hire out much of the work needed on a property. By doing this, you will be able to get things done correctly and in a much faster manner than if you were to do it yourself. When we first started we did basically all of the work by ourselves. While we learned a lot, it was a manner of necessity, because we were broke college kids. Having a day job can provide you with the money you need to gain traction faster.

A Day Job Can Hinder You

We are extremely knowledgeable in fixing issues that come up on our property. Brad taught himself how to do plumbing by installing it by himself in one of our properties. We are also experts at restoring hardwood floors, as we have done this on at least a dozen places. While a day job can give you the money to hire out jobs, you will probably never be skilled at repairing damaged property. You simply don’t have the time to learn all of that, which can be a drawback. By not knowing what a job needs to be completed correctly, there are more opportunities for you to underestimate to cost of what it would take. There is also a possibility of your hired workers not performing a job correctly and you not finding out until it seriously costs you.

With a day job, you won’t be able to be actively monitoring your hired workers to see that they stay on task. This can cost you money and sometimes projects will have to be redone several times. You will have less ability to manage the project as a whole, and this can create issues. For example, you may not have been able to explain to the contractor what you would like done when it needed to be performed and the contractor might have to do his best guess on what you would want. There can often be a disconnect between what he thinks you want and what you would actually like done.

Having a traditional day job can be a great way to start to invest in real estate slowly on the side. A day job can provide you with financial stability so you can get a bank loan and not be stressed trying to pay your monthly expenses. While it can be difficult to manage contractors while you are working, you will be able to get work completed faster and better than if you did the work on your own. Ultimately, it’s a tradeoff between putting in more time and sweat equity into a project or putting in more money.

The Best Way to Find Your Niche

September 2, 2015 by Lacie

How do you go about finding your real estate niche (your area of real estate expertise) if you don’t know anything about real estate? How can you become an expert when you have no clue where to start?

Mentoring

Mentoring isn’t a new trend, but I feel like it has come back in style recently. Mentoring is a relationship you develop with someone who is more knowledgeable in an area than you are. A mentor will help you learn about that particular subject and offer their advice. So in our case, we are looking for mentors that are real estate investors.

Why You Need a Mentor

They will hold you accountable.
You will avoid costly mistakes by listening to their advice.
They can help you build your network.
You will become a better investor, faster.

How to Find Potential Mentors

Real estate investors are everywhere! You probably just didn’t realize it, as most tend to keep a low profile. The following are great ways to find local investors that could become your mentor:

Local Real Estate Groups

You might not realize this, but there are usually several real estate investor groups in your area. You can check out these websites to see if you have a group in your area:

National REIA

REI Club

Unfortunately, you can’t find these groups in every area. However, you still might be able to find a group by searching for “State name landlord association” or even “county name state name landlord association”. Most of the members of these groups have quite a bit of experience in real estate and love to share their knowledge.

Local Small Business Owners

Often local small business owners become successful in their business, and then decide to buy real estate as a way to protect and grow their wealth. Do you have a favorite neighborhood restaurant that is locally owned? Ask the owner if they invest in real estate. You might be surprised that they often do. . One of my very first business mentors owned a pizza shop that he started when he was 18 years old. We met him when he was in his early 30’s; by that time he owned the entire plaza that the pizza shop was located in. I think he could relate to me and my husband as we were so young when we were first starting out. He is a dear friend of ours and I know that his wisdom in those early years helped us avoid several costly decisions.

Newspaper Classified Ads

If all else fails, you can go through your local newspaper’s classified ads and call the number that is listed in the ad. Tell the person a little about yourself and that you are interested in getting into real estate. Offer to buy them a cup of coffee to pick their brain.

What You Should Do

Once you find a potential mentor, you can ask them if they would be willing to let you interview them about what they do. Offer to buy them coffee or take them to lunch. Try to make it casual and fun.

Before you show up for your meeting, do a little homework to make the most of it. Research the local real estate industry and the person you’ll be meeting with (if you can) so you have a context for the experience. Come prepared with questions, but be ready to listen. It is very important that you are respectful of the investor’s time. If you tell them that the meeting will only take one hour, be sure to keep track of time, and end the meeting in one hour. You will not be able to gather all of the information you want from one meeting with an investor, but you should see it as a great start to a fruitful relationship.

What to Ask an Investor

Here are some sample questions that you can ask an investor:

What made you want to go into real estate?
Can you tell me about the first property you bought?
How many properties do you currently have?
What’s your favorite type of property to buy and why?
What are some of your greatest challenges?
How have you overcome those challenges?
What are some characteristics of a successful investor?
What other people do you work with on a regular basis to make you successful?
What are some of your favorite books?
Do you have any routines or habits that you think have gotten you to where you are today?
What is something you wish you would have known when you were just starting out?

Building the Mentoring Relationship

At the end of the first meeting, you can ask the investor if they would be willing for you to follow them for a day so you can get a more in depth look at what a typical day is like for them. If they are willing, you should be prepared to help out where needed. If that goes well, you might want to ask if they would be interested in having coffee with you once a month. This is how a mentorship relationship starts. Don’t look at the relationship as a one-sided “What can he do for me”, but be willing to volunteer to help them as needed. You want to make sure that the investor would be gaining something from the experience as well. I’m sure that if you are helpful and polite, you will find a great real estate mentor who can help you on your path to success.

Being Broke Can Be Your Greatest Asset

August 28, 2015 by Lacie

As many of you may know, Brad and I bought our first rental property when I was 20 and Brad was 22. We were broke college students with a baby. When I say broke, I mean like, we would sometimes have $40 in our bank account and would need to make it through for a week on beans and rice. While I’m not sure I’d ever want to go back to those days, I know that those difficult times allowed us to take the risks that we never would have done otherwise. There are several reasons why being broke helped make us who we are today.

You Have Nothing to Lose

The truly freeing aspect of being broke is that you have nothing to lose. Like in our situation, we were already broke college students that had a child, so we figured why not try something crazy like invest in real estate? The worst thing that would happen would be that we would fail and have to go out and get real jobs like all of our friends were doing anyway, so the downside didn’t seem that bad.

You Work Harder

We didn’t focus on what would happen if we failed, because we didn’t think we would. I know that may sound naïve, but when we bought our first property, we just had the attitude that this was going to work. This was the path that we had chosen so we were all in. I think that sometimes people make a choice and then get scared or try to talk themselves out of it. We didn’t make that an option for ourselves, and were willing to do whatever we could to make it work.

Since we had very little money, we used one thing we did have: time. We put in a good many hours of sweat equity into our first few properties. This not only saved us money, but now that we hire out many of our property jobs, we know what we want and are less likely to get taken advantage of.

You Get Creative

Sometimes constraints can free you up to be more creative. If you have an unlimited budget and unlimited time, it becomes almost overwhelming with all the choices you would have. You would get so overwhelmed with all of the things that you COULD do, that you never end up doing anything. It’s kind of like Netflix. I love Netflix, but I think I actually spend more time scrolling through the entire list of movie options than I actually do watching movies. Why? So many choices.

When you have no money, you get creative with how you are going to accomplish your goal. This applied to us in our real estate adventures. We would figure out creative ways to finance a property. Our first property deal was great structurally, but was ugly on the inside. We spent the little money that we had on paint and refinishing hardwood floors that we found under old, nasty carpet. That first deal would not have happened if we weren’t broke, because we wouldn’t have had the constraints forcing the use of our creativity.

Success Can Be Redefined

Sometimes being successful is not always measured in dollars. There is value in learning, and to us the property that we invested in (among other businesses we tried) was a huge education. We were both taking classes in business at the time, but those were more theory than substance. There really was no better business education for us than the business projects that we were working on when we were broke. We still own those first few properties, and the lessons that we have learned from them have brought us to where we are today.

The Number 1 Thing that a Landlord Needs To Be Successful

August 26, 2015 by Lacie

As a landlord, there are so many skills that you need to have. You need to be a jack of all trades, so to speak. However, there is one key trait that I think you need to be a successful landlord, and one that most people overlook.

The 1 Key Trait

The number one thing that you need to be a great landlord is respect. I bet you thought I was going to say something else, but I believe respect is truly the foundation of any good relationship, so that includes the landlord/tenant relationship as well.

A Good Landlord is Respectful of his Tenants

A successful landlord does not view himself as high on a pedestal above his lowly tenants. You have to see it as a mutually beneficial relationship. While it is true that a landlord is making money from a tenant, a tenant is also getting a place to live without the risks of owning. If done correctly, the landlord is gaining a valuable relationship. The right tenant will keep your property in working order and help it appreciate in value. They not only pay the mortgage and all of the associated fees with owning the property, but their rent money will give you passive income every month. Respect your tenant for that!

A Good Landlord Respects Themselves

Your job as a landlord is to keep the place safe and in working order for your tenants. It is not your job to be their counselor or their friend. You are not helping a tenant by letting them get six months behind on rent because they are going through a tough time. They might be going through a tough time, but now you have set the expectation that you are not to be respected and people will often take advantage of that.

A good landlord will:

Give his tenant plenty of notice before entering the property
Fix issues in a timely manner
Expect tenants to pay on time every month and work to correct payment issues quickly
Clearly set boundaries with a tenant early to avoid issues

A Good Tenant is Respectful of his Landlord

A good many problem tenants can be avoided if you do your proper screening, but especially when you are a new landlord, it’s not always easy to tell right away. You will usually learn all that you need to about a tenant in the first month or two.

A good tenant will:

Pay on time
If they will be late with their rent for the month, they will notify you well in advance and work out a payment plan with you to get back on track
Alert you to repairs that are needed in a timely manner
Not call or text you in the middle of the night for things that they can take care of themselves (like changing a lightbulb, yes, this has happened)
Make reasonable requests

I hope that you can see how respect is the most important aspect of the landlord/tenant relationship. It really does affect everything that you do, and if you have a respectful relationship with your tenant, your property will be profitable for years to come.

5 Tips to Find Property Online

August 24, 2015 by Lacie

Did you know that an estimated 80% of people do online research on a property before they contact an agent. I read that somewhere the other day, please don’t ask me for a reference, just trust me, mmmkay? You cannot rely on an agent to bring you the good deals; you need to be proactive and constantly searching. Unfortunately most people don’t know what to look for on their own, and can waste a lot of time.

Here are some tips for searching for property online:

TIPS

See the previous post on Finding Your Real Estate Niche. Do you have a clear idea of what type of property you are looking for? Do NOT get tempted to “just look” at good deals in other areas. I know it can be hard when you see something for a great price, but it’s in another town an hour away (not that we would ever do that!); but it’s just not worth it. Stick to the neighborhoods you know and like.
Don’t always discount a property because of the pictures or lack thereof. Some of the best deals we have found have been because there were no pictures with the listing or the pictures were terrible and blurry. If it turns off most people, that is more opportunity for you!
Look for particular key words or phrases in the listing:

-Motivated Seller

-Time on Market is a year or more

-Needs TLC*

-Needs Some Work*

-Fixer-Upper*

-Contractor Special*

-Attention Investors

*Watch out for these ones, as sometimes these places just need to be bulldozed.

Get online often. Brad usually gets on to check properties every work day. It doesn’t take him long to do this, maybe 15-20 minutes a day. Good deals get listed and can go quickly, so it’s important to get on there often. Another benefit of this is that you will learn what is typically listed on the market and what a good deal is as you are being exposed to the real estate market every day.
When you are first starting, view this as “practice”. Right now you are learning, and that’s ok. You need to get online and see what’s out there for a while to begin to notice patterns. Don’t get heartbroken because there is a deal that you were slightly interested in online, but then found out it sold for a great price. We live in a very small town, and there are more deals here than we can even take on. As I’ve heard it said, “The deal of the century comes once a week”. You may not believe it now, but I think it’s true.

WEBSITES WE USE

Zillow.com

We like Zillow because it’s very user friendly and has a great map feature that shows you the location of the properties. With Zillow, you type in the zip code or city on the first page and then the second screen will show you the map with what’s on the market currently. From there, you zoom in on the map to the specific neighborhood that you like. Then you can click on a pin to get more information on the property. Zillow also has a great “bird’s eye view” that you can look at the houses surrounding the property you are interested in.

Homesandland.com

Our local homes and land website has an advanced search feature that we can include neighborhoods we like, plus things like condos, multi-family, and investment. So you can use these features to your advantage. Just keep in mind that sometimes properties are not always listed under the correct section.

I hope that these tips were helpful for you, and that you get online soon to start searching for some great deals in your area!

The Best First Rental Property

August 21, 2015 by Lacie

I know what some of you are going to say, there is no “best” first rental property. But, just hear me out on this one, and you might end up agreeing with me!

Qualifications of a Great First Property

A great first property would have the following characteristics:

Easy to Find
Easy to Get a Good Deal on
Relatively Low Risk
Long Term Tenants
Easy to Sell

What fits these qualifications?

Single-family homes of course! You can always find a wide assortment of single family homes in any area. As most people are homeowners before becoming investors, you are typically familiar with single-family home prices in your area. You know what neighborhoods are desirable, so you will probably know a good deal when you see it. Single-family homes are lower risk than say a four-unit apartment building. Banks are more likely to lend you the money, and you are typically going to have less tenant turn over (say that 10 times fast!). The cash flow might not be as great as other investment properties, but for someone just starting out, it can be a great way to learn the ropes of dealing with tenants. You can also hold onto the property for a little while, then turn around and sell it faster than a 10-unit place because both investors and owners will be looking for single-family homes.

Our Steady Foundation

I’m sure you can tell that I am a little obsessed with single family homes as rentals. We have a family that has been in one of our rental houses for 10 years, yes, 10 YEARS! They send a check every month, and we rarely even hear from them. They keep the place spotless, and are fantastic people. That place is so little work for us; we almost forget that we have it…until the check comes in. It’s awesome. I would encourage you to strongly consider a single family home as your first rental property. Our single family homes are like our rental property foundation. Kind of boring, but they provide a steady income stream with minimal work, so we can do some of the more risky investments. If you are thinking about investing in your first property, I’d highly encourage you to make it a single-family home!

How to Rent Your House

August 19, 2015 by Lacie

So maybe you had a “starter home” for a couple of years, and have now found your dream home. Or, maybe you inherited a deceased family member’s home. Heck, maybe you want to travel the world for a year. These are all great opportunities for you to get into the rental property game!

Here are the basic steps you’ll need to follow to rent out your house:

Step 1: Research Your Local Rental Market for Demand

You need to know if there is a demand in your area for the place you want to rent. Look in your local paper at the rental ads, if there are a good number of ads for places like yours, then there is likely to be a big demand. You can also go online to Zillow.com and see what is listed for rent there.

Step 2: Find Rental Prices

While you are researching, make sure that you are also making note of what your property type is renting for. In our area, we can charge quite a bit for a single family home, as they are in high demand and are difficult to come by. Most renters of these properties stay in them for years, which is great for the landlord, but tough on the potential renter.

Step 3: Make Sure Odds and Ends are Taken Care of

Now is the time to take care of the 20 little things that need to be fixed. That outlet that doesn’t work, that drain that drains a little slow; these things should be fixed before you rent the place out. When try to do as much work as possible before we get a place rented, that way everything is taken care of and we don’t get calls at all hours for little things that stretch out over a month. You will also want to clean the place from top to bottom. Hire it out if you have to, but if you want to attract good people, you need a clean place.

Step 4: Advertise it!

There are quite a few ways to do this. Right now, we advertise in our local paper’s online section (it’s free!), Postlets through Zillow.com, and word of mouth. If you can include pictures in your ads, you definitely want to do that. It will help attract the people that you want. Also check out the post about placing a great rental ad.

Step 5: Field Calls/Texts from Potential Renters

As you are fielding calls and texts from potential renters, you want to get the people you are interested in to look at the property in person. You can eliminate a good amount of people just by talking to them on the phone. This is what you want. You don’t want to waste your time showing your place to people that you won’t rent to. If they ask for you to “work with them” on the deposit, or have a pet when you said no pets. No, no, no. Only schedule showings with people that don’t ask for concessions right off the bat, it will save your time and sanity. See this post about scheduling property appointments.

Step 6: Show Your Place

Now is the time to meet people in person and get to know them. It’s kind of a strange game at this point. The potential renters need to decide if they like your place, and then you need to decide if you want to rent to them. When I show a place, I am never a salesman. I just let them look around and answer any questions they may have.

Step 7: Decision Time

Once you’ve shown your property to several people and several tell you that they are interested, you have to make a decision about who you’d like to rent to. Truthfully, this is where the “horror stories” come from. The most important step in renting your house is to find good people. I’ve been at this for a long time, and I can tell you that every time, EVERY SINGLE TIME that I had a strange feeling about someone but didn’t listen to it, I got burned. Trust your gut. Does their story check out? Are they polite? Are all of your interactions with them professional and appropriate? It can take some time to find someone you really like. That’s ok. Sometimes, if your place hasn’t rented as fast as you would like, you start to get desperate and make concessions in your mind. Don’t do it! You could be dealing with these people for years, so think about that as you are making your decision.

Step 8: Sign the Lease

Once you’ve decided on your renter, you need to set up a time to sign the lease. Sometimes, things fall apart before you sign a lease. These people are looking for a place to rent so if you don’t make a decision fast enough, they could be long gone. Make a decision quickly, and then schedule to sign the lease as soon as you can with your desired tenant.

Step 9: Start Collecting Rent

The first month or two are where you will probably find out if you chose a tenant wisely. Things should run fairly smoothly from here on out. Keep in contact with them more often at first. Check in to see if everything is working properly. Fix anything that comes up as soon as you can to develop a good relationship. Then you can hopefully enjoy many years of rental income for almost no work for years to come!

Find Your Real Estate Niche

August 17, 2015 by Lacie

Before you even start to look at property, you have to decide what your niche is. This probably seems like the most boring step, but is extremely important. A little bit of planning now can save you a lot of frustration and mistakes years down the road. We have learned this from experience so trust us on this one!

What is a property niche?

A niche is a specific segment. A focused, targetable part of a market for certain products or services that has unmet demand. With that in mind, a property niche is a specific property category that has room to grow.

The following chart shows just some of the ways that you may classify a property.

Type of Property	Target Market Income	Rental Purpose	Location
Single Family Home	Low Income/HUD	Long Term Rental	Small Town
Duplex/Triplex	Middle Income	College Student Housing	Suburb
Multi-Unit	High End/Luxury	Vacation Rental	Large City

So from the chart you could have a duplex that you rent to college students from a middle income background in a small college town or you could have a single family high end vacation rental in a large city. The point is that you have to narrow down what types of properties that you are looking for before you even begin your property search. Currently we have mostly single family homes and duplexes and triplexes that are aimed at the middle class in a long term rental situation in a small town.

When you know your niche, it makes it so much easier to narrow down what properties you are interested in looking at. You can get very specific. There are only a few neighborhoods that we are interested in buying in. These are areas where we live and have worked, so we know them very well. There are always good deals out there, but if the deal isn’t in our area, it isn’t worth our time.

Disaster from Not Knowing your Niche

We have a great example of not knowing your niche, and it led to disaster. Several years ago, Brad was planning on attending a property auction in a town about an hour away. He was going purely for observation purposes to see how the process works. However, it was just such a good deal, and since we didn’t have very specific criteria of what we would and would not buy, he put in a bid and won the auction. It was a single family home directly across the street from a school. The town was a small town, but was very close to a large University and people that worked at the University often lived in this small town. We planned to fix up the property and resell it below market value for some quick cash. The numbers worked and it seemed to be a good deal. The problem was that the property was an hour away from where we lived at the time. We worked to fix up the property over a couple of months, and we were miserable. The long commute and time spent juggling all of our responsibilities was a nightmare and severely damaged our relationship as a couple. To top it off, as we didn’t know the town very well, we soon discovered that we made some serious mistakes and the house did not sell quickly at all. We eventually had to rent it for years, and recently did end up selling it. Unfortunately, we made nothing on the deal. We didn’t lose any money, but we made a serious mistake in buying a property that was not even close to where we reside. Now, we have very strict criteria for where what properties we invest in.

Narrow down your niche and save yourself frustration and heartache.