Recently I was at an event and listened to one of the new real estate "Gurus" who was selling his software product he said would do everything you need to be successful buying real estate. He referred to his software as “Done for You.” He said it was the greatest thing since sliced bread. He said it would find the good deals, figure what you should pay for the property and what the repair costs will be for every property you look at without ever seeing the property. I was amazed how easy he made it sound. I couldn’t believe how many beginning investors in the audience fell for his pitch and bought his product for $997.00.
I know we are in the computer age and I realize that the computer as well as our Iphones can be valuable and time saving tools in our real estate investing businesses. In the quest to simplify and broaden our profit, potential tools like these can be helpful to find more opportunities.
I have seen software products presented that give the investor lists of different types of properties, their location, their price and comparables in the area. A system that helps the investor find money to fund their deals from a list of people who lend money. I have seen software that tells you how much you should pay for a property even if you haven’t seen the property. (Good luck on that one.) I have also seen different products that show you how to calculate repair costs from a data base of items from Home Depot and Lowes.
I know for sure that there is no substitute for doing your own due diligence before buying any property and no software can adequately do that for you.
Software can’t have a discussion with a seller to ask what their needs really are.
And I know that simply throwing money at the sellers for their property in many cases isn’t the perfect solution to why they are selling.
I hope you will be cautious of the Huckster who promises that their software product will do everything for you to make a fortune buying real estate in one software program. Their product may give you some of the information you need but it can’t give you everything you need.
Every investor MUST know these 5 important steps before making an offer to buy any property.
- They have to find deals that have a good chance of creating a profitable deal. Not buy just any house… just to make money. Not every property you look at is a good deal.
- They have to think about what the best use for every property is and what they plan to do with each property if they buy it. If they aren’t sure why they think a property is a good deal, it probably isn’t.
- They have to analyze the numbers of each property to be sure there is a deal there. If the property is a rental, the rent the investor receives each month must be able to cover the cost of the property plus return a profit.
- They have to be able to negotiate with the sellers, not a real estate agent to come to an agreement that will hopefully be good for the seller as well as good for them.
- Then they need to make intelligent offers to buy every property -- not just throw money at the deals. That may be good for some sellers but not all.
Good deals must be created; they don’t just happen. I can tell you from years of experience, if you want to be a successful real estate investor there will always be some work involved that you must do yourself. I am saying always think twice before buying any software product that supposedly Does It All for You. I truly don’t believe that is possible.
Never get caught up in a speaker’s presentation and think their product will give you everything you need to be a successful real estate investor. May I suggest you never waste your money on any product that isn’t going to give you what you really need to make intelligent buying decisions? Never get caught up in the hype.
Good Luck and Happy Investing
Larry Harbolt is a successful investor and national speaker, with particular expertise in creative financing and land trusts. You can find out more about Larry at LarryHarbolt.com.