How Does Real Estate Investing Work – Is There One Magic Rule?
By Tom Dunn
(cont) Think very carefully through what I’m about to say. Etch it into your mind and heart. Follow it faithfully and you will come close to guaranteeing your investing success. Forget it and you flirt with disaster.
YOU MAKE YOUR MONEY WHEN YOU BUY. Very simply, this means that your profit is literally created at the time you purchase a property, through the price you choose to pay and the terms you negotiate in your purchase offer. There is no other time in the life cycle of an investment when you will exercise such tremendous control over your potential profit.
There is no other time when you can come so close to guaranteeing your success, and also no time when you can virtually guarantee your failure.
Buy right, for the right price and terms, and you will be able to weather virtually any hidden defect in the property. Sure, some of your profit may be eaten up correcting the problems, but there will still be something left for you- something to allow you to move on to your next project.
Buy wrong, spending too much on the property, and even if you do everything else right you will be hard-pressed to make money.
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