Welcome to the Vibes by Alicia podcast and our episode, The Funny, the Bad, and the Crazy in Selling and Buying Real Estate! We have guest Elmer Garcia, a bilingual real estate expert with us, who has been in the industry for five years and has seen his sales double during the COVID pandemic. Elmer has also built a successful team within his brokerage and is passionate about helping other agents build their brands and succeed. In this post, we will be discussing what strategies real estate investors should use to maximize their profits. We’ll be talking about the differences between investing and buying, the nuances to look out for, and how to get the best deals. I’ll be outlining how we did it in detail and I’m sure you won’t want to miss it.
About Elmer Garcia
Today on the Vibes by Alicia podcast, we are so thrilled to welcome our very own real estate guy, Elmer Garcia. Elmer is a true mover and shaker who has been in the real estate business for five years. He started pre-COVID, and was determined to keep going despite the pandemic that threatened to shut down the industry. Elmer kickstarted his journey in real estate in 2019, and after a few bumps on the road, Elmer has now built up a successful team and closed 33 transactions in 2021. Elmer is the perfect example of staying determined and pushing forward, no matter what life throws at you. Tune in to learn more about his journey and the intersection into our lives.
Why do real estate investors need to use strategies to maximize profits?
Real estate investments can be lucrative ventures, but it is important for real estate investors to use strategies to maximize profits. One of the most effective strategies for maximizing profits is to diversify investments. By diversifying investments, investors can spread their risk across multiple properties and markets, reducing their exposure to market downturns. Additionally, diversifying investments can help investors capitalize on potential opportunities in different markets and better manage cash flow. Another important strategy for real estate investors is to create a comprehensive business plan. A comprehensive business plan should include an analysis of the current market conditions, an assessment of risk and potential returns, a timeline for reaching financial goals, and a marketing strategy. By creating a comprehensive business plan, real estate investors can better understand their financial situation and develop a plan for achieving their goals. Additionally, a well-crafted business plan can help investors identify potential opportunities and minimize risks. Utilizing strategies to maximize profits can help real estate investors maximize returns and minimize losses.
Here are the steps you need to follow:
1. Research the Real Estate Market: Analyze the current market conditions, research potential investment properties, and understand the local regulations.
2. Find the Right Property: Look for properties that have the potential to increase in value and can be flipped or rented out.
3. Establish a Budget: Establish a budget for the project and ensure you have enough money to cover the necessary costs.
4. Secure Financing: Secure the necessary financing for the project and ensure you have enough money to cover the down payment, closing costs, and other expenses.
5. Hire Professionals: Hire professionals to help with the project, such as a real estate agent, contractor, lawyer, and other necessary professionals.
6. Manage the Project
Step one in starting a real estate project is research. It is important to research the market, the area, and the property you are considering. In this case, the research should focus on the downtown property that Elmer and his wife were interested in. Research should include the area, the neighborhood, the cul-de-sac, any nearby amenities, and the current market trends. It is also important to research the property itself, such as the condition of the property, any zoning issues, the history of the property, and any potential problems. Additionally, research should include researching the local real estate agents in the area, as well as getting referrals from other investors and homeowners in the area. Finally, research should include reading reviews of the property, researching any tax implications or potential issues, and researching any other factors that may affect the purchase. Researching the property thoroughly is the key to a successful real estate project.
The second step in starting a real estate project is to determine a budget. It’s important to take into consideration all of the costs of the project, such as the cost of the property, any renovations, closing costs, and other fees. It’s also important to factor in ongoing expenses, such as taxes and insurance. All of these costs should be taken into account when determining a budget. Additionally, it’s important to consider any potential rental income that the property may generate, as well as the potential return on your investment. This will help you to determine the maximum budget for the project. Finally, it’s important to begin the process of negotiating the purchase of the property. Once you have determined a budget, you can begin to negotiate with the seller to get the best possible price for the property. Negotiations should include discussing the condition of the property, any renovations that need to be done, and any other costs that may be associated with the purchase. It’s important to be prepared for negotiations so that you can get the best possible deal for the property. Negotiations are a key part of any real estate project and can make or break the success of the project.
2. Research the Real Estate Market: Analyze the current market conditions, research potential investment properties and understand the local regulations.
Researching the real estate market is an important step in any real estate transaction. To do so effectively, it is important to analyze the current market conditions, research potential investment properties and understand the local regulations. The first step is to analyze the current market conditions. This includes researching the current market trends, such as the average price point, the number of homes on the market, and the average days on market. It also involves understanding the current economic climate, such as the unemployment rate, the average wage, and the interest rates. These market conditions can help determine whether it is a buyer’s or seller’s market, and what the expectations should be for the transaction. The second step is to research potential investment properties. This includes understanding the location, the condition of the property, and the potential resale value. It is important to understand the local regulations, such as zoning laws, building codes, and tax implications. It is also important to research the neighborhood, including local amenities, nearby schools, crime rate, and the local economy. This research can help inform a potential investor’s decision and set realistic expectations for the potential return on investment.
The third step is to understand the local regulations. It is important to understand the laws and regulations that govern real estate transactions in the local jurisdiction. This includes understanding the process for obtaining permits and licenses, the local tax rate, and any restrictions that may be in place. It is also important to understand the local laws and ordinances that may affect a potential investment property, such as noise ordinances or building codes. The fourth step is to consult with a professional. A real estate professional can provide invaluable insight into the real estate market. They can help to identify potential investment properties, provide guidance on the local regulations, and help to negotiate the best possible deal. A real estate professional can also provide advice on the best financing options and help to identify potential risks associated with a particular investment. Consulting a real estate professional can be an invaluable asset in the real estate transaction.
3. Find the Right Property: Look for properties that have potential to increase in value and can be flipped or rented out.
The third step in investing in real estate is finding the right property. It’s important to look for properties that have potential to increase in value and can be flipped or rented out. Elmer Garcia, an experienced real estate agent, explains that when looking for property, it is important to keep an eye out for new developments in a certain area. Investing in properties in an area with upcoming developments can lead to higher appreciation in the future. Additionally, it is important to consider the location of the property and look for houses in a quieter neighborhood or on a cul de sac with an elementary school in the area. These small details can make a big difference in the future when the investor is looking to sell. It is also important to do thorough research and make sure to cross all your t’s and dot all your i’s. Elmer and his wife learned from experience that it is important to not get too excited and rush into investing in a property without doing thorough research first.
For those looking to rent out their property, it is important to think about the local market. Doing research on the rental market in the area can be a great way to determine if the property is a good investment. It is important to look at the average rental rates in the area to determine if the property can be rented for a price that will cover the mortgage and other associated costs. Additionally, it is important to look at the local job market and make sure there are plenty of job opportunities in the area. This can help to ensure that the property will be rented out and the investor’s investment will be secure. In conclusion, finding the right property can be a great way to ensure a successful real estate investment. It is important to do thorough research and look for areas with potential for appreciation, potential to be rented out, and plenty of job opportunities. While it can be tempting to rush into an investment, it is important to take the time to do the research and make sure the investment is right for you.
4. Establish a Budget: Establish a budget for the project and ensure you have enough money to cover the necessary costs.
In order to establish a budget for the project, you will need to determine the costs associated with the project. These costs may include materials, labor costs, taxes, permits, and any other fees associated with the project. Additionally, you should also consider any potential costs that may arise during the project such as unexpected delays, additional materials, or any other unforeseen expenses. Once you have identified all the costs associated with the project, you can begin to create a budget to make sure you have enough money to cover the necessary expenses. It is important to be aware of the potential risks that can arise during the project so that you can be prepared and have a contingency plan in place if necessary. Finally, it is also important to track the budget and spending throughout the project to ensure that you are staying on track and not overspending.
Once you have established a budget for the project, it is important to then create a plan for how you will manage and track the spending. You should create a system to track the incoming and outgoing funds for the project and regularly review the budget to make sure that it is accurate and up-to-date. This will help ensure that you are sticking to the budget and not going over your allotted funds. Additionally, you should also have a system in place to alert you if any unexpected expenses arise or if you are exceeding your budget. This will help you remain on track and ensure that the project does not go over budget. Finally, it is important to have accountability when it comes to managing the budget. It is important to have someone who is responsible for monitoring the budget and ensuring that the funds are being used responsibly. This individual should be able to answer questions about the budget and be held accountable if any errors or discrepancies arise. Having someone with oversight over the budget will help keep the project on track and help ensure that the project is completed within the allotted budget.
5. Secure Financing: Secure the necessary financing for the project and ensure you have enough money to cover the down payment, closing costs, and other expenses.
Step 5: Secure Financing: Secure the necessary financing for the project and ensure you have enough money to cover the down payment, closing costs, and other expenses. Securing financing is an important part of any real estate project, and it is important to ensure that you have enough money to cover all of the costs. Generally, you will need to provide a down payment of up to 20% of the purchase price, closing costs, and other expenses such as taxes and fees. You can secure financing for your project through a variety of sources, such as banks, credit unions, private lenders, or online lenders. It is important to shop around and compare rates and terms from different lenders in order to find the best loan for your needs. You should also consider the amount of money you will need to set aside for closing costs and other expenses, as these can add up quickly. Additionally, it is important to consider any additional costs and fees associated with the loan, such as origination fees, and to factor these into your budget.
Once you have secured financing for your real estate project, you will need to manage the loan. It is important to understand the terms and conditions of the loan, such as the interest rate, repayment period, and any fees associated with the loan. Additionally, you should make sure to keep up with payments and avoid late fees or other penalties. Managing your loan responsibly will help to ensure that you can pay off the loan in a timely manner, and it can also help to improve your credit rating. Finally, it is important to remember to budget for any unexpected costs that may arise during the project, such as repairs or upgrades. Unexpected costs can add up quickly, so it is important to be prepared and have a plan in place in case you need to access additional funds. By budgeting for these costs and ensuring you have enough money for the down payment and closing costs, you can ensure that your real estate project is successful.
6. Hire Professionals: Hire professionals to help with the project, such as a real estate agent, contractor, lawyer, and other necessary professionals.
To hire professionals to help with the project, such as a real estate agent, contractor, lawyer, and other necessary professionals, one should first create a list of the professionals needed and the services they will provide. When creating this list, it is important to consider the budget and timeline of the project, as well as any local regulations that need to be followed. Once the list is complete, the next step is to research potential professionals to bring on board. Look for professionals that have experience in the specific project and can provide references. Additionally, make sure to read reviews and ask questions to ensure that the professional is a good fit for the project. Once the list of potential professionals has been narrowed down, reach out to them and schedule interviews to discuss the project in further detail. During this stage, ask questions to ensure that the professional is knowledgeable and can provide the services needed. Additionally, it is important to discuss the budget and timeline to make sure that the professional can meet the project’s requirements. Once the interviews are complete, select the professional that best fits the project’s needs and moves forward with the project.
When working with professionals, it is essential to discuss the scope of the project, timeline, and budget. This will help ensure that the project is completed efficiently and on time. Additionally, make sure to be clear about the expected deliverables and the payment process. It is also important to be mindful of any legal issues that may arise during the project. Make sure to be clear about the roles and responsibilities of each professional and to have all agreements in writing. This will help protect everyone involved in the project and will ensure that the project runs smoothly.
7. Manage the Project
Manage the Project Managing a real estate project is an important step in ensuring success. The first step is to create a plan and timeline. This plan should include all aspects of the project, from start to finish, and should be as detailed as possible. Make sure to include a budget for all necessary expenses, such as fees, materials, and labor. Once the plan is in place, it is important to assign tasks to the appropriate team members and make sure that everyone is on the same page. It is also important to set deadlines and ensure they are met. Monitoring progress and making sure that all tasks are completed on time is essential. Finally, it is important to stay organized and keep track of all documents and paperwork related to the project. This will help ensure that everything runs smoothly and that the project is completed on time and on budget.
In addition to planning and assigning tasks, it is important to provide regular updates and communication to the team members involved in the project. This will help keep everyone in the loop and ensure that the project stays on track. It is also important to provide feedback to team members and make sure that everyone is on the same page. Regular check-ins with team members can help ensure that tasks are being completed in a timely manner and that objectives are being met. Finally, it is important to have a contingency plan in case something goes wrong. This plan should include steps to address any issues that may arise and should be communicated to all team members. Having a detailed plan in place will help ensure that the project is completed on time and within budget. With careful planning and management, a real estate project can be a success.
Real estate investments can be highly profitable ventures if done correctly. To maximize profits, it is important for real estate investors to research the market, find the right property, establish a budget, secure financing, hire professionals, and manage the project.
We’re a great example of those who have used these strategies to successfully double their real estate investments during and after the COVID pandemic. With the right strategies and a bit of hard work, you too can achieve the same success.
I’d love to hear how you apply these to create successful real estate investing. Leave me a comment on how it went for you or drop any questions you want me to answer!
LISTEN TO ENTIRE EPISODE HERE
With love, The E’s