Literal and emotional attitude

[Michael Hadvab]

I am new to real estate investing and I’m just beginning to dig in. I have a couple issues. I was wondering if anyone has them too. I am a very literal person. I also look at properties and become emotionally involved. This emotion seem like it becomes a purchase factor. The emotional issue is I look at a property and see all that’s wrong and if I can’t live with the way it is, then I will not make an offer, unless I can gouge the offer so I can gut the project and start new. It might be a touch of OCD. Any one have any advice?

[Patricia Steiner]

Michael, are you thinking like a home buyer or an investor? If you were buying your own home to live in, the emotional connection makes sense. But investing in real estate as a business comes down to some pretty unemotional factors like location, number crunching, market demand, best use, etc. You certainly don't want to buy a property that will require a lot of renovation unless it comes with a solid ROI. And, you don't ever want to over-pay. But it may be that you're not at the right starting point.

My recommendation is to find a realtor who works with seasoned investors to help you navigate the process and to add bench strength to your search.  Have that realtor show you "like properties" that are not for sale - maybe currently for lease - that you can use to gauge "marketable condition to marketable rent."  A big pitfall for new investors (actually even seasoned ones) is over-improving a property.  What you put in, you won't necessarily get back.  

Once you have better understanding of what renters in your market expect in your market for various rent price points, you'll be in a better position to analyze and select investment properties.

Hope this helps...I have a feeling you're going to have your first rental very soon.