You’ve found that great deal! You can get it at a good price and fantastic terms. Let’s jump at it. WAIT!
Before you buy, you want to figure out what you’re going to do with it. Getting out of a transaction successfully is nearly as important as getting into it right. The riskier the market is, the more important it is that you know where you’re going next.
What is your goal in purchasing this property? Do you want ongoing income on a monthly basis? Are you looking at making a quick profit to turn it over into something else? Do you need all of your capital out of it right now or just some of it? Are you looking for a specific return? Is it part of an overall plan or are you throwing mud on the wall to see what sticks?
If you’re looking at income property that will give you an ongoing monthly income, have you figured out your return on investment? Is it in the realm that you are happy with? If not, check out Increasing the Bottom Line Monthly. If the return is where you want it to be, what instrument do you want to use? Do you want to rent it? Check out Risks of Renting. Maybe a lease-option would be better. You might want to go to Pros and Cons of Lease-Options.
Maybe you’re not looking for the monthly income. Is it the quick turn-over that is the key? Even though you’re getting a good deal, can the market handle this particular property if it is priced right to give you the gain you’re anticipating? How long will it take for you to sell it at that price? Do you need to make some repairs or improvements in order to get your ideal price? For some further hints, go to Flipping.
Maybe the key here is to change the use or improve the property in order for you to realize the results you’re looking for. What is the cost involved? What is the time frame involved? Will you be able to come up with the additional monies for these changes and/or improvements and still make the mortgage payment for that length of time plus however long it takes to re-sell the property? Want some formulas? Try Dollars and Sense.
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