How to Lower Your Risk In Real Estate – Real Estate Risk
Kris Krohn here with Limitless TV and today we’re talking about how you minimize your risk in real estate. I’m gonna share with you the top three ways to do this and also my silver bullet on how to make sure you put yourself in the safest position for massive profits So I’ve got three factors for you to be aware of today when it comes to reducing risk in real estate and these are things that a lot of investors actually are not aware of. I’ve just picked it up from doing thousands of deals and these are part of the rules that I personally use when doing real estate on single-family homes. So the three factors to help reduce that risk first come down to low maintenance. You know a low maintenance home is one that is a newer, it’s in better condition. It does not need to be a new home but a home in the last 20 years that it’s been build is gonna be definitely different from a home built 50 years ago, 80 years ago, a hundred years ago. Things that are using old plumbing in an old electrical old homes just have a lot of maintenance issues. They have a lot of maintenance problems and tenants generally complain a lot about these homes. So the first thing is I’m looking generally for low maintenance homes that means newer homes. The second factor is I’m looking for home in a nice area. If I buy a home in the slums I’m gonna attract lower income, I’m gonna attract people that usually skip town, I’m gonna attract people that beat up on the homes and so I want nice area. If you know what the slum area looks like, I don’t care how good the cash flow looks like on paper in reality it is likely going to be a lot worse than you think or hope that it’s going to be because old homes have higher maintenance and bad areas usually end up having higher maintenance not just homes but higher maintenance tenants. So that’s the second one that you want to watch out for. The third characteristic that I use in selecting a market when buying a home is, it comes down to you what the average income is of the people in that area. And what I mean specifically by that is that our national median income is 44 thousand dollars but if I have an area where the average income is $60,000 that’s one of my sweet spots. $60,000 ends up putting the type of person into a home that is home owned or quality minded it’s the kind of person that values their credit and it’s the kind of person that we use even their own money to help do upkeep on the house and make sure that everything stays really nice. The more you see that income drop the worst people are going to treat your house. So go with people, go with an area not just not just an area where the incomes 40,000 and you’re hanging out for someone that makes more than that because that’s also really risky too. Why? because you’re not playing the averages you need to go to an area where the average income is higher. Where you have generally nicer homes that are going to be lower maintenance. And if you watch out for these three things, it’s going to help you hands-down experience far less risk. At the end of the day real estate produces, you’ve got your equity that you walk in to. It produces this cash flow and ultimately how it performs a paper from reality is going to come down to its maintenance level, the area that you buy it in and the average income that people in the area make. And as a bonus, aside from these three things there’s one more magic bullet. A magic bullet of what I do to make sure that I’ve reduced my ultimate risk in real estate. The ultimate bonus that I can give you today for reducing your risk is to buy right, What do I mean by right? If they don’t got equity, I ain’t playing. That’s what I mean by buying right in addition to the great tricks that I shared with you. Ultimately the greatest safety comes from Warren Buffett’s advice where he says buy low sell high. An eleven hundred page book snowball is all about teaching buy low sell high. And in real estate, what you’re doing is if it were to take you on a hundred thousand dollar home 15 years to pay off thirty five percent of the mortgage then why not just start and skip ten of those years by buying into a home with a discount today. It means that if life goes on on its head, cancer comes in, you need to change things up you need money for something you can liquidate your asset. You’re gonna come out with more money than you started with and you’re up on top from day one. That’s the bonus is by right. if you don’t got equity don’t touch that. The ultimate way to reduce risk is just have a powerhouse professional experienced team and come in and do the work. That’s honestly what I do. And so if you want to access that team, click the below. Learn more about who we are, what we do. And have my team build your portfolio and you keep 100% of the profit.