I thought the best way to show you how to think like an investor is to actually take you to a house which you’ll see in the video above and point out some things why I would say an investor’s mind is totally different from that of a consumer’s or someone who’s looking at buying a home.
When buying a property, you have to make a decision. Do you want to be an investor or do you want to be a dabbler? You see, an investor looks at a house and fall in love with the DEAL. The deal is everything! It’s the numbers!
There’s a big difference between a house and a home. One of the best distinctions for me, when I buy my own home, is that home is a place for raising my family. I’m looking for neighborhood and school districts. I’m looking for the right size that can accommodate them. That’s the EMOTIONAL SIDE.
The investor mindset however, is focused on the NUMBER SIDE:
“Is the square footage right for this specific deal I’m looking for?
“Am I buying it at the right kind of discount?”
“How much work is there to do on the inside, if any, when it comes to fix-up and repair?”
Those are the NUMBERS.
Now let me ask you. If the value of the house is $100,000, and you’re an investor, would you buy the house for $100,000? The only thing that would make you do that is if you’re buying it for all the wrong emotional reasons. An investor falls in love with the deal, the numbers. If you want to succeed in real estate, you’ve got to think like an investor!
Let’s talk about the house in the video. I bought that house as an investor because I wanted to do a lease option on it. During filming, we just finished having it renovated. You’ll see what the difference is between a house and a home:
Because I didn’t buy that house for me and my family to live in, this is the approach I took – the walls have one tone which means that the same color that’s on the walls is the same color on the doors and the paneling. Why not do a two tone on the paint? Simply because a lot of money to do two tone.
The bathroom is very basic and simple. The living room is very simple with a simple window. The kitchen does not have a granite counter, it probably still has its original sliding door instead of an updated vinyl, the sink isn’t a 12-inch deep stainless stell sink. cabinets have been painted which is practical really, and the floor’s been refinished. The whole kitchen is FUNCTIONAL, but nothing fancy.
This is my strategy. I specialize in single family homes and I’m focusing on providing solid functional homes to people. It is not in my strategy to do anything high-end for my lease option houses. And so the difference is, when you become an investor, you want to hone in on making homes available for people. And we’re not ever playing in anything above the median. We stay below the median.
This is the strategy I believe is the single best. If you want to think like an investor, you must understand that it all comes down to basic, beautiful, and functional. Something affordable for MOST people, yet still fits that ‘American Dream’.
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