As a new or experienced Real Estate business owner, you need to constantly step outside the box and analyze your business.
The Japanese have a word for constant and never ending improvement and it's called "Kaizen".
As I have reviewed my Real Estate Quick Turn business and coached others to do the same, I have uncovered three traps that prevent even the most experienced investors from bringing their Quick Turn business to the next level.
1.
Inspection: This one should probably be labeled "lack of inspection".
The first error is not getting any property you buy professionally inspected.
Most people think that they have seen enough Flip This House Episodes to be able to skip an inspection and do it themselves.
A qualified inspector is worth every penny because they have fully inspected hundreds of houses and have been exposed to many more structural and mechanical problems than you have ever even thought of.
Using a professional inspector will also save you a tremendous amount of time with them handing you a written report of all the issues with the property.
If you are going to do the work yourself you now have a checklist of things to repair.
If you're going to sub out the work to contractors, you now have a scope of work for the contractors broken down by area.
If you are a new investor stop doing your own inspections, even if you are a licensed general contractor.
The one thing you miss could eat up the profit in the deal or even worse could take money out of your pocket.
2.
Emotional Attachment: One of the biggest mistakes you can make is to get emotionally attached to a property.
In most cases, if you decide to buy a property because you fell in love with it, you are doomed.
You will probably overpay for the property and put yourself behind the eight ball right from the start.
Next, you will fix up the property as if you're going to live there.
Keep in mind; you are not going to live there so fix up the property to match the quality of the other houses in the neighborhood.
Finally if you are emotionally attached when it comes time to sell the property, you won't be able to accept anything but the best buyer who is not going to change a thing in your perfect house and who is willing to pay full price.
After all you will think your property is worth every penny.
3.
Over Improvement: Prior to starting any rehab I always have three of the best local realtors come to see the property and tell me what their buyers are looking for and the price they would list it at if I gave them the listing.
This technique has saved me endless hours of trying to figure out which improvements I should make and has helped me avoid over improving the property.
It is normal to want to do every upgrade but if you do, you will spend unnecessary money, blow your rehab budget, and ultimately lose some if not all of your profits by over improving the property.
Stick to the fundamentals and listen to your Realtors and make your improvements slightly above what the minimum buyers will accept and you will sell the property quickly if priced correctly.
The opportunities and profits in the Real Estate Quick Turn Business are endless.
The keys to this business are minimizing mistakes and capitalizing on opportunities.
Who knows how many more apartments units I could have bought if I had limited my mistakes early on in my investing career.
I challenge you to review your business systems and reduce the frequency of your mistakes.