What separates successful real estate investors from the ones who don't see a return?

Hi, this is Jason Skelton with Pacific National Lending.

Welcome to another Q&A session where I answer mortgage questions from you all on the internet.

Today's question is:

"What separates successful real estate investors from the ones who don't see a return?"

Summary:

Jason identifies two factors. The first is research: he acknowledges how exciting it is to buy a house and fix it up, but stresses doing genuine due diligence before committing. The second, which he considers the more decisive factor, is assembling a good team. That means a realtor who knows the area and is familiar with the housing stock, and a lender who understands how to finance the project while keeping costs low so the investor can actually turn a profit. He adds a third consideration tied to the financing itself: investors need flexibility in case the rehab and sale take longer than planned, so they are not caught in a bind when the loan comes due.

Answer:

There are a couple of things when it comes to real estate investing. Research is huge. It gets exciting to try to buy a house and fix it up and flip it, but definitely do your due diligence and your research. But the main thing I think that really helps with that is having a good team. Having a realtor who knows the area, who is familiar with the homes. Having a lender who is familiar with how to help you finance that and keep your costs low while you're trying to turn a profit. And also making sure that if it takes a little bit longer to fix it up and sell it, that you're not put into a bind of that loan becoming due, and that you have some flexibility on that. The ones who stall out are usually the ones who skipped the research or didn't build the team around them.