All Forum Posts by: Joe Assad

Think you have what it takes to be a great real estate investor? Of course you’re a hard worker—that’s a given. You’ve put in countless hours building a firm knowledge of the foundational principles of real estate, and you’re up on the market trends. You manage money well, and you even know how to be flexible as the market ebbs and flows. But these are just the basics.

Cultivating long-term success as a real estate investor doesn’t happen overnight. If you want to play in the big leagues in this industry, it’s going to take more than zeal and a tailored suit. Successful real estate investors—those who’ve played the game for a while—all have certain traits in common. It’s these attributes that set them apart from the rest, giving them the advantage over their competitors.

If you’ve read this far, you must be wondering by now if you fit the profile? The following eight characteristics are key indicators for success in this field—it’s what separates the best from the merely good

Passion.  Above all else, successful real estate investors are passionate about what they do. With the staggering outlay in time and money that investing demands, it’s passion that carries an investor through the late nights when the market is ripe, as well as through the everyday grind when business is slow. Although many can enjoy a taste of short-term success, only the few who passionately love what they do will persevere in the long run.

Tenacity.  A great real estate investor doesn’t give up—they’re tenacious. A combination of drive and optimism allows these successful investors to keep trying, showing up every day, even when the chips are down. Taking no for an answer, is a concept they don’t understand. If one door won’t open, they look for another way in. You’ll never find a successful real estate investor crying in his, or her, beer.

Discipline.  Because the workload is substantial—with an extensive variety of tasks to juggle—it’s vital to an investor’s success to be disciplined, not only with regard to their profession, but all aspects of their life. Many successful real estate investors simplify their lives to the basics. They follow a routine. They wake early, eager to dive in. They are methodical in their approach to business and know how to prioritize.

Vision.  To be a successful real estate investor, you must use your imagination. What looks like a dilapidated shack to the average person, may look like the groundwork for a three-story apartment building to an investor—if they have vision. They don’t see what is; they see what could be. To have vision means to see a project’s potential for the future.

Confidence (without ego).  Although a great real estate investor will temper their optimism with a touch of realism, there’s no room for doubt when it comes to decision-making. If you want to be successful in this arena, you’ve got to be confident. If you don’t trust your own judgment, than you can’t expect those around you to place their trust in you either. On the other hand, a successful entrepreneur knows that ego can be their ruin. Therefore, a savvy investor knows they must walk a tightrope of confidence without ego—showing what they’re capable of through action rather than by talking a big game.

A sense of timing.  The real estate market is fickle and fraught with unexpected twists, turns, ups and downs. Knowing when to strike—like a cobra—requires patience, poise, and an impeccable sense of timing. The successful ones trust their gut. This ties in with having discipline—knowing when to hold back, lie in wait, and then intuitively knowing when to say, now is the time to act.

Knowledge of people.  There are very few things in this world that you can do entirely on your own, and investing in real estate is certainly not one of them. From buyers to developers to builders to bankers, a successful real estate investor knows who they’re dealing with, what their best interests are, and how to communicate with them straightforwardly and authentically. The greats surround themselves with other greats—like-minded individuals that value the same things as they all work together toward a common goal.

Grit.  Investment comes with its share of uncertainty, and with uncertainty comes risk. A great real estate investor takes this in stride and doesn’t allow fear to overtake them—their spirit is indomitable. They know they must act boldly, but this doesn’t mean saying yes to anything and everything that comes down the pike. Those who are successful in the field know when to step out on the ledge, and they possess the firmness of character not to get blown away. Their risks are calculated, not foolhardy. If you have grit, you can make a bold, risky move, knowing you’ll be okay regardless of the outcome.

As the American entrepreneur, Robert Arnott, once said, "In investing, what is comfortable is rarely profitable." In one sense, the business of a real estate investor is slow, broad, and long, and in another it is life on the edge. Investing can be cold, hard, and frustrating at times. It requires a special kind of personality to hack it. To wake each day and be your best self— in business and in life—is the true key to long-term success.

When flipping a property managing costs becomes essential to ensuring a good return-on-investment. But as a savvy investor, it is important to understand which expenditures are justifiable and can help move a property or even command a higher price. While sometimes an afterthought in the fixing and flipping process, staging a home can be an effective way to market your property and entice buyers.

Walking into an empty home void of any decor can make it difficult for many potential buyers to muster enthusiasm for the property. Home staging is a technique whereby the seller uses furniture and decorations to construct a model of what the space could look like once someone lives there. Creating a dynamic environment makes a home more attractive by helping buyers visualize its potential, and it can also be a good tool for camouflaging any shortcomings.

But staging a home goes far beyond just aesthetics, there are real tangible business benefits.

With most people beginning their search for a new home online, how you market a property can have a big impact on whether a potential buyer ever steps foot in the home. According to the National Association of Realtors (NAR), 87 percent of those using the Internet during the search process found photos of a home to be very useful. That said, a well-staged house can help your photos stand out among the myriad of competition online.

Homes that are staged also stay on the market for a significantly shorter period of time. A study by Real Estate Staging Association (RESA) found that unstaged homes spent an average of 184 days on market whereas homes that were staged before going on the market sold on average in 23 days. This is an important point to consider, because for every month your property is on the market you are responsible for the carrying costs (i.e. mortgage, property taxes, insurance, utilities, maintenance and homeowners association fees). So, a lengthy sales cycle can really cut into any profit once you finally sell the property.

Further proof of the power of staging comes by way of a study from NAR that found evidence that it can offer an ROI of as high as 10 percent.

Staging a home can be as expensive or inexpensive of a venture as you want to make it. For investors who are regularly fixing and flipping homes, you may find it worthwhile to invest in some pieces of furniture that you can take along with you from project-to-project. For those who are not as confident in their sense of style, you may find that hiring a professional stager is the best option for you. While the cost to stage a home will vary depending on the location and your needs, to stage a completely vacant home the price can range from $975 to as much as $5500, according RESA.

Whether choose to go it a lone, or hire a professional, here are a few tips to keep in mind as you prepare a home for the market.

Clean and declutter. Don't underestimate the power of shining floors and clean counter tops. Buyers will be quick to write-off a property that doesn't seem well-maintained. A good scrub of the place will help you present the home in the best light. Also, remove any clutter that may have accumulated during the fixing process. Cabinets and closets should be clear of unnecessary items, as not to detract from the overall space.

Home Lighting. Often times sellers do not use proper lighting when staging a home. As a result, the space can look gloomy, which is a big turnoff for most buyers. One simple way to create a warm environment is to increase the wattage of the bulbs used in light fixtures to 100 watts. This small change can make a dramatic difference on the overall ambiance. Another best practice is to make use of several types of lightning including ambient (overhead), task (pendant) and accent (table).

Furniture Groupings. A room does not need a lot of furniture to make it come to life. A few well-positioned pieces can go a long way in creating flow and making a space feel accessible. To create such an environment, pull furniture away from the walls and move it to the center of the room and create conversational groupings. This approach will open up the room and create the illusion of more space.

Finishing Touches. Accessorizing can make a house sparkle. The good news is that these stylistic touches do not need to come at a huge cost. Even seemingly insignificant things like adding fresh flowers to a table and candles to a bathroom can make a space feel homey and inviting, which can help potential buyers connect with the space on a deeper level.

Staging is about presenting a lifestyle to a prospective home owners. And the smallest of details can help them buy into the dream while also delivering you a great return on your investment. 

Hi Jose,

AssetAvenue might have a loan program that fits your funding needs. Our real estate investor loan programs include rehab, bridge and rental. We offer competitive rates and you can get an instant quote online at www.assetavenue.com. To get additional details on our loan programs contact us at 855-464-2118.

Hi Dominique,

AssetAvenue might have a loan program that fits your funding needs. Our real estate investor loan programs include rehab, bridge and rental. We offer competitive rates and you can get an instant quote online at www.assetavenue.com. To get additional details on our loan programs contact us at 855-464-2118.

Hi Rasheema,

AssetAvenue offers a rehab loan program that will fit your funding needs.  We offer competitive rates and you can get an instant quote online at www.assetavenue.com. To get additional details on our loan programs contact us at 855-464-2118.464-2118.

Places like Oakland and Brooklyn have become harbingers for the real estate renaissance happening in once rough and tumble neighborhoods. With a short supply of homes on the market and limited new construction, communities that were once considered unsavory are now becoming desirable investment opportunities. Those willing to bear the risk of these investments are often rewarded handsomely once an area has turned around, as is proof with the aforementioned cities.

But part of being able to capitalize on these opportunities and achieve the maximum return-on-investment is spotting these areas while they are still in their state of becoming and while asking prices are still low. By watching for these key market signals, you can identify areas poised for a turnaround.

Proximity to nice neighborhoods. One way to scout for diamonds in the rough is to identify the rundown neighborhoods that border the highly desired ones. Areas that surround attractive neighborhoods stand to be revitalized before others due to the inevitable spillover that occurs as an area becomes more populous. Often times these areas will be rezoned just before expansion begins so that is a good clue that redevelopment is on the way. Look for areas with more flexible zoning, as they will often see a surge in residential and commercial development, which will aid these areas in evolving much quicker.

Thriving artist community. It is no surprise that artists have the vision to spot hip neighborhoods often before anyone else. These bohemian types have a keen eye for finding eccentric, up and coming areas that are often much more affordable than surrounding areas. Artists are also good settlers and bring a strong sense of personality to the neighborhoods they live in. The creative character that they infuse into their communities can add a lot of value to an area and make it blossom into a highly prized housing market for investors and homebuyers.

Burgeoning retail segment. When restaurants, bars and coffee shops start moving in, it is a good indicator that a neighborhood's identity is changing. Major retailers spend a significant amount of money and time scoping out areas for stores, so if you see a Starbucks pop up in a neighborhood, you can bet the company has sufficient evidence to believe that the area is on the rise. The presence of the coffee chain has become such a telltale sign that housing prices will increase, it has been called the Starbucks Effect. But major chains are not the only sign of revitalization, independent shops can also signal that change is just around the corner.

Easy access to transportation or highways. Whether you are looking at properties in bustling urban areas or homes in the suburbs, accessibility is key. Transportation is essential for connecting people to employment centers, so those areas with infrastructure in place usually will not stay underdeveloped for long. In large cities, identify neighborhoods that are close to public transportation, as they will become prime targets as population explosion in urban centers continues to push people outward. When looking for real estate investments in the suburbs or rural areas, look for neighborhoods that have easy access to freeways and bridges or offer commuter shuttles to nearby bigger job markets.

Decrease in days on market (DOM). Monitoring data around how long comparable homes are taking to sell can tell you a lot about how a particular market is trending. While homes in sluggish neighborhoods might stay on the market for months, an area on the upswing might see a reversal of this trend. If you notice a steady decrease in the number of days homes are on the market, it can be a good indicator that the neighborhood is heating up. Typically, a market will experience declines in DOM before housing prices escalate. By keeping a watchful eye on this data, you can get in on the market while the gettin' is good.

As the housing supply crunch continues, neighborhoods that were once seen as in imperil will be ripe for a turnaround and will start to look more attractive for homebuyers, making them a good investment opportunity. These types of properties often require a different strategy though, so investors should be prepared to act fast to secure the best home price. But on the other side, you may need to hold onto a property longer than you would in a developed area to allow it appreciate and reach its potential. Working with a real estate agent to understand where a market is on the redevelopment cycle will help you determine just how long you should expect to wait to achieve maximum returns.

When it comes to real estate investing, many people only consider detached homes. But in certain markets condos and townhouses can also be worthwhile investments, even preferable, and deserve consideration when evaluating potential opportunities. Each property type has their pros and cons, but the important thing is understanding them and determining what characteristics best suit you as an investor. As you look towards your next investment, here is what you should know about investing in condos, townhouses and detached homes.

Cost of entry. When it comes to initial costs, condos are typically going to have the lowest barrier to entry followed by townhouses. These property types usually cost less to renovate than detached homes since there are common areas that fall into the homeowner association's (HOA) responsibility. Condos also have the added bonus of potentially cheaper insurance. Often, a condo will only need "four walls" insurance since the shared areas will be covered by the HOA's policy. But condos typically carry with them the largest HOA fees out of the three property types, which can make these investments more costly than they initially let on (more on this later). And while detached home do have a bigger initial price tag, if you are prepared to sign up for more rehab projects, you can find good deals.

Appreciation. The rate at which a property appreciates will vary by location, so it is always wise to consult a real estate agent in the area where you are looking to make an investment. That said, in recent times appreciation for condos has outpaced single-family homes. While condo values were hit hard during the recession they are now appreciating at 5.1 percent annually compared to 3.7 percent for single-family homes in the U.S..  The current outlook for condos is good, but growth could be limited since investors cannot take advantage of forced appreciation methods. With a condo you cannot improve the exterior of the building or landscaping like you can with a townhouse or detached home, factors that can improve the curb appeal and force up the value of the house. Many investors also still find townhomes and detached homes attractive since you own the property the home is on, and it is an appreciating asset.

Maintenance. If you are looking for a low-maintenance investment, a condo is going to be the way to go. It is much less onerous, because the HOA is responsible for maintaining all the common areas of the building. So, as an investor, you only have to worry about updates to the interior of the unit purchased. On the other hand, when investing in a detached home, you are responsible for refreshing and maintaining the exterior of the property. Tasks like roofing, painting and landscaping can be costly and time consuming. A townhouse falls somewhere in between a condo and a detached home. Like a condo, it has the benefit of an HOA that provides services like snow removal and landscaping, which can make it easier to keep up while holding the property. But in the case of a townhouse, owners are responsible for the exterior of the home itself, which means you could be hit with some of the same costs as you would with a detached home.

Homeowner's Associations (HOAs). When considering the type of property to invest in, the most commonly cited pitfall for condos are HOAs. While the association maintains the property this comes at a premium that can range from several hundreds of dollars a month to nearly a thousand. The HOA can also intact a special assessment should there not be enough in the cash reserves to cover any necessary repairs to common areas. These unanticipated fees can reach into the thousands and quickly cut into profits down the road when you sell the property. Another potential downfall of condo HOAs is that they often maintain strict rules as to the changes you can make to the investment property.

While townhome and detached homes can also have HOAs, the fees tend to be lower than condos since you own the property the home sits on. As aforementioned, more of the onus of updating and maintaining the property will fall on you, but when making updates you are building equity in your property and those costs can be recouped when you go to sell the property.

There is no one-size-fits-all approach when it comes to real estate investing. How a property type will perform will vary by location. They key to investment success is to understand the market you are investing in and what you are willing to put into the project.

The potential for significant returns has long made flipping houses a popular avenue for investing in real estate. And the current market conditions and low interest rates of late have made it all the more attractive to investors. In 2016, average gross flipping profits reached heights not seen since 2005.

With stats like that, it is easy to get caught up in the market fervor and only see the rewards, but fix and flips have some inherent risks. If properties are not properly vetted early in the process, it can lead to disappointment and unrealized profits. To make sure your next flip is not a flop, avoid these pitfalls in investing.

Blindly investing in a market. Researching a neighborhood is essential when selecting a property to rehab. As the old adage goes, location is everything and certain characteristics around where a property is located can pay big dividends.

For one, a neighborhood within a strong school district is often a good indicator of high resale potential. In fact, homes in the best school districts have 77 percent more value than homes located in low performing school districts.  Additionally, homes in top school districts sold on average eight days faster than homes in below average districts.

Homes located in areas with low crime also tend to have a higher property value.  People who are in the market for a home prioritized safety even over price when considering a neighborhood.

There is also evidence that homes close to public transportation command higher prices. A realtors study showed homes within half of a mile of a high-frequency public transportation were worth 41 percent more.

There are a lot of factors to consider when evaluating the location of a potential investment, and a good real estate agent can help you identify opportunities that are most likely to payoff.

Failing to calculate post-renovation value. When house hunting for a property to fix and flip, you will be evaluating those in disrepair that are being sold as-is, which is to say at a value that is representative of its current condition. But before you even think about putting in an offer, you must first determine the expected value of the home once it has been fully renovated.

Known as the after repair value (ARV), it is the most critical number to your fix and flip venture. The viability of the project is dependent on your ability to manage costs. The ARV will help you determine the maximum amount you should pay for the house and renovations, so that you don't invest more into the property than it is worth.

The Internet offers a lot of real estate tools that can be useful for cursory research around potential ARV, but most sites are working from estimates. So, once you are serious about a piece of property, you should consult a real estate agent well-versed in the area to develop a comparative home analysis. A licensed agent will have access to a multiple listing service (MLS), which can provide data on how much similar properties in the area have sold for in recent time and how long they were on the market. When evaluating properties, it is important to stick within a mile of where you are looking so that you get an accurate view of the market.

Forgoing an inspection. Rehab projects can offer significant gains, but they can also present unforeseen costs if you do not take the right precautions. It might not be possible to avoid all surprises during the process, but you can minimize them by having a home inspection before finalizing the purchase.

A house inspection should be included in the offer process to protect yourself from any unknown issues. Specifically, there should be a contingency clause within the house purchase agreement that states the buyer has 5-7 days to have the home inspected by a professional and that the purchase is dependent on the outcome of the inspection.

A skilled inspector will look for wood rot, pest infestations, roofing problems and cracks in the foundation. Major structural issues like these might be more than you bargained for and can make your project a money losing venture if not identified beforehand. But even minor issues that were previously missed can be an important bargaining chip in negotiating a lower purchasing price.

Flipping houses can be financially lucrative. And by avoiding these potential downfalls, you will protect your investment and set yourself up for success.

We also like the following:

- Boulder, CO

- El Paso, TX

Gateway cities like San Francisco and New York have long been favored by real estate investors, because they are fairly recession proof and tend to be insulated from job loss and declining property value during economic strife. They have continued to garner interest in recent time because Millennials delay purchasing homes and moving to the suburbs. But with supply constraints and demand hitting peak levels in these markets, the yields from these investments are on the decline. So, investors might find that the grass is indeed greener elsewhere.

Secondary cities one of the top real estate trends of the year. These markets include cities like Denver, Nashville and Raleigh-Durham and are characterized by above-average population growth, a flourishing economy and a lower cost of living and lower cost to do business than other large metros.

Many of these areas have benefited from revitalization of downtown areas where restaurants, bars and mixed-use development have moved in. Nicknamed 18-hour cities, these burgeoning markets offer the amenities of major cities, but they don't operate on a 24/7 schedule like their larger counterparts. For those looking for the urban lifestyle at a reduced price, these cities have become a good layover point between gateway cities and the suburbs.

Secondary cities have also become attractive, because they have experienced a lot of job creation. Companies are increasingly considering these markets, because it is cheaper to establish a presence and run a business than in the largest cities. As this trend continues, it will feed the overall growth of these markets, making them an even more attractive investment opportunity.

Investing in 18-hour cities is not without risk though. In the past, secondary markets have not been as resilient in economic downturns as gateway cities. It is not understood how these booming markets of today would perform in the event of another recession, so they could be vulnerable to massive job loss and/or plunging property values if another economic decline were to occur.

Analysts have reason to be optimistic about secondary cities going forward. During the current period of expansion, there has been self-restraint in adding new supply to these real estate markets, which means the population explosion in 18-hour cities will be able to absorb the supply on the market. Also, unlike its gateway counterparts, secondary cities still have room for expansion, so they can maintain equilibrium between supply and demand. As a result, cap-rate compression (i.e. the ratio of net operating income to property asset value and often a predictor of how profitable a property will be) has been able to stay at moderate levels, which translates to higher yields for investors.

While the the big six cities continue to be of interest to investors who enjoy the security of those markets, increasingly investors are more willing to take calculated risks with emerging cities. As a result, only two of the top 10 cities (San Francisco and Los Angeles) were not secondary cities. As you consider investing in these alternative markets, here are some to consider.

Dallas/Fort Worth - With strong job growth and good cost of living and cost of doing business, Dallas/Fort Worth ranks as the top area for real estate investing. There is some concern about overbuilding, but the consensus is that the current market can support it.

Austin - A longstanding favorite, Austin continues to prosper from diverse job creation in STEM and technology, advertising, media and service jobs. The one downside cited is that the infrastructure has not been able to keep pace with the population explosion.

Charlotte - Continued job growth coupled with the development of urban centers have allowed Charlotte to continue to thrive. Some point to the city's singular focus on the financial services industry as a potential detractor, as it may not allow for the same growth as technology-centric markets.

Seattle - Popular with both domestic and global investors, Seattle has benefited from growth in diverse industries. While investors note that the city has been able to maintain growth for some time, there are limited development opportunities and some worry it might not be able to sustain its current pace of growth.

Atlanta - The lower cost of doing business in Atlanta has attracted corporate relocations has contributed to strong market growth in the city. Its biggest shortcoming is the "perceived accomplishments of public and private investment."

While 18-hour cities have traditionally been a riskier investment, they are beginning to write a new story. As they continue to diversify their economies to include the tech and healthcare industries as well as develop mixed-use communities, they are becoming an increasingly more stable investment. And for those looking for bigger yields, these cities could prove to be very rewarding.