In considering how to start 2006 with the Real Estate Secrets Weblog, I thought that I’d look to the wisest member of my currently small family: My cat.
Yep … my cat, Killer (yes, that is his name), is 21 human years old! Depending upon with whom you speak, he could be as old at 189 cat years.? I think Friskies Cat Food ought to do a story on him … As you can imagine, Killer is not the high-energy furball that he was as a kitten, but he still rules the house. Two 60 lb. dogs and two other, heavier, younger cats live in mortal fear of him!
With all of that accumulated wisdom, Killer has a few things to teach us about buying, investing in, and borrowing against real estate. These basic ideas apply to something as simple as buying your first investment house to something as complicated as developing a regional power center, so listen to the cat!
- Know Your Territory. One thing Killer at which Killer is a master: Prowling his territory. The same thing goes in real estate investing. Pick an area in which you want to invest and spend time in it. Drive the streets, walk the sidewalks, visit the shops. Get to know the good parts, the bad parts, and the parts with potential. Where is there growth, new construction, decay? By doing this, when an opportunity arises, you’ll know if it’s one you need to buy or if it’s something that become someone else’s problem!
- Proceed Slowly. Killer moves a bit more slowly these days (wouldn’t you, with 189 year old joints???). I’m not talking about writing up an offer in a hot market … sometimes you just can’t wait when there’s competition looking at the same project you are. I’m referring to the speed of your investigation.? Whether before or after the accepted offer, take your time when looking into the transaction. Check the title, the zoning, what the city wants to do in the area, the neighboring properties, the neighbors, the leases, the plumbing, the parking,? … everything. And don’t rely too much on third party reports, get out there and look at things yourself. It’s far easier to stay out of a bad deal than to get out of it later. Which leads to Killer’s next lesson …
- Use the “Smell” Test. Killer sniffs prodigiously before settling into a new place. If he doesn’t like the smell of something, he moves on to the next. So should you. Sometimes everything can look just right. All the “t’s” are crossed and the “i’s” are dotted, everyone you’ve hired has given the deal a glowing review, your spouse is jumping at the bit to close escrow, even the stars are aligned, BUT … something doesn’t seem right. You can’t tell what it is, you can’t point to it, you can’t articulate it, but that inner sense is telling you that something is WRONG. That’s your intuition telling you to get out and you need to heed it. You may lose a few hundred dollars on all those reports you paid for, but that is far less to pay than having to extricate yourself from a deal that goes bad later. I heard a great quote years ago: “You sometimes make your money on the deals you don’t do.”
- Let People Know What You Want. One thing Killer is not, is “shy.” When he wants something, he lets me know! You should take this position when dealing with others involved in your real estate transaction. Remember: It’s your money and you don’t want to buy a problem. You have a every right to get answers and explanations from those with whom you’re working in your transaction. This includes your Realtor, loan officer, appraiser, inspector, architect, contractor, etc. Speak up! Ask questions. Be heard!? Meow!
OK, that’s enough from the big chair (with the cat blanket on it) for now. Killer will be back with more investment tips in the near future and if you have any questions to ask Killer about real estate, please comment and he’ll get right back to you … after his nap. Have a great 2006!
Craig S. Higdon, President
Excelsion Mortgage, www.RealEstateFinancingBlog.com
Craig Higdon has over 13 years experience in financing commercial loans, home loans, small business loans, construction loans, and land loans.? Excelsion Mortgage is a full service mortgage brokerage and consultancy offering wealth-building strategies and debt management services.
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