The current glut of inventory, including foreclosures, presents a unique opportunity in the Twin Cities Real Estate market area for smart investors.

Real estate investors who flip houses often try to trim costs and boost profits by handling everything themselves. After all, if you can buy directly from the homeowners and sell the home yourself, you can probably save at about 10 percent on real estate commissions alone (a few percent if the sellers agree to share their savings with you and six to seven percent when you sell).

Cutting out the middleman may make sense sometimes, but when you’re investing in real estate, cutting costs by forgoing the services of real estate professional is usually penny wise and pound foolish, especially for the novice investor. By doing so, you expose yourself to more risk, limit your opportunities, and may even decrease your profits.

Investors who think they are saving loads of money by not using an agent usually haven’t done the math or considered the following benefits an agent offers:

•           An agent can put you in touch with a reputable mortgage broker who can help you secure low-cost financing for your investments.

•           An agent can help you find and evaluate investment opportunities.

•           A buyer’s agent can help you negotiate a lower price and better terms when buying the home directly from the owners.

•           A listing agent can help you sell your home for more money and in about half the time, on average, as you can sell it yourself. (When you consider that holding costs are about $100 per day, every month your investment property is on the market costs you $3,000.)

•           An agent can protect your back by making sure you do not overpay for a property and by helping you avoid the most common pitfalls of buying and selling real estate.

•           When the time comes to close on the purchase or sale of a property, your agent can help you navigate the closing to ensure that it proceeds smoothly.

•           An agent can help you determine which repairs and renovations will deliver the highest return on your investment dollar.

•           An experienced agent keeps his or her finger on the pulse of the market and can help you deal with market fluctuations.

•           An agent can refer you to contractors and subcontractors who do quality work for reasonable rates.

•           An agent who knows about real estate and mortgage fraud can help you avoid becoming the next victim of or unwitting accomplice to fraud.

 

 

All real estate agents are not created equal. When you are investing in real estate, you want the best of the best. Here are some of the qualifications you should be looking for:

•           A REALTOR®;: Not all agents are certified REALTORs®;. REALTORs®; are held to a code of ethics and much higher standards than your average agent.

•           Full-timer: Part-time agents tend to do real estate as a side job and may not have the time, energy, and enthusiasm of a full-time agent.

•           Experience: An agent with several years of experience is generally preferable to an agent with little or no experience, but choosing a novice is okay as long as the person is being guided and coached by an agent who has the necessary experience.

•           Productivity: Productivity is a sign of quality, and busy agents are generally better than those who have little business. Who has the most SOLD signs in the neighborhood?

•           Availability: Although you want an agent who’s busy, you also want the agent to be available and responsive to your needs. Sometimes, the best approach is to work with an agent team. An agent team typically consists of one or more agents along with support staff. With a team approach, you always have someone on call to address your questions and concerns, and if you have a problem that the staff can’t solve, your agent can jump in and handle it.

•           Your comfort level: How do you feel in the presence of this particular agent? Can you see yourself working with this person or is this the type of person you usually lock horns with? You don’t need to be bosom buddies with your agent, but you do need to have a rapport that enables you to communicate effectively.

Ralph R. Roberts, GRI, CRS is an experienced real estate investor and consultant and the author of Flipping Houses For Dummies (John Wiley & Sons).

There is an old adage in Real Estate that you dont’ make money when you sell it, you make your money when you buy it.  Dont let your "flip" profits slip away by making uninformed decisions about a property.  Use our knowledge and experience to know what the potential upside to an investment property is before you buy it!