THE TEN RULES TO REDUCE RISK & INCREASE PROFIT
POTENTIAL IN REAL ESTATE INVESTMENT

By Dino Nicosia, Broker of Record, Investpro Realty and Appraisal Ltd., Brokerage

Location, Location and Location: Only buy location.

   This also relates to the 4 Powerful Ps = Prime Properties, Produce Profit. It is a simple rule that really works.  Always make location and prime properties your top priorit

Other People's Money (OPM):

Use other people's money. You don’t need your own cash to invest. You need to have "access" to cash. Let other people's money profit for you. Keep your money as a safety net.

Cash is King:

Buy properties that provide positive cash flow, and do walk away from properties that claim future potential cash flow. Avoid the "risky" no money down strategy with negative cash flow. Invest enough money down on a purchase that will allow a good return on investment and provide a comfortable cash flow.

Hold and Prosper:

Buy for the long term holding and avoid short term strategies. History has proven over and over that values will increase in time. Unless you are a seasoned investor, avoid buying with intentions of flipping.

No income = No go:

Avoid buying properties that do not produce any income at all. (For example; raw land and vacant lots). Unless you are a builder/developer, stay away from this type of investment.

Avoid investments with short term tenancies:

Motels, hotels and seasonal properties are a few examples. These properties have a high turnover rate and a volatile vacancy factor which are directly affected by bad weather, gloomy economic or political climate, cost of gasoline etc.

Be patient:

There is a relationship that exists between real estate and time. This means that there is no bad time to buy real estate as long as you have the time to wait. Eventually you will profit. You must have patience and endurance and you will be rewarded.

Start small:

...and grow slowly. If you buy too much, too fast, disaster could surely follow.

Don't confuse "real estate" with "business":

A business grows in one way – through the sale of products. Real estate grows two ways – through cash flow and growth in value.

Be a "Wise Investor":

Know the business before you make the plunge. Educate yourself! Learn about all the regulatory laws that will govern rental properties (such as fire, health and safety, landlord and tenant laws etc.) Learn all the real estate terms and formulas. Know the tax laws that will affect your investment. If you are looking for a partner, choose wisely.