The expression “can’t see the forest for the trees” helps describe many investors problem when seeing a true investment opportunity. You can work out details and numbers, but sometimes you need to see the potential and overall picture.
Real Estate is an asset class, like gold, like stocks, like anything bought, sold, and traded, and not everything is able to be quantified and analyzed at the time of the sale. Sometimes you need to forecast, predict, and have a general sense of the market.
A deal today may never come around again at the same level on a particular property, and yes there will always be properties and opportunities, but if you are experienced enough to have a feel of the market, then sometimes you must trust your intuition and act. The details and due diligence are great traits of a good investor but so is decisive action on a deal that you know is right.
It is a balancing act this risk vs reward thing, but action trumps indecision, and without risk there is no reward, so when sizing up a possible real estate investment, the tree can provide a great indication but if the opportunity is within the forest, and you lose sight of the overall picture, the overall deal and opportunity will pass you by.
Duplexes are great investments, and provide great opportunity, but its not a stand alone asset, the timing, the deal over the next 2 years, 5 years, 10 years, factor into that opportunity. If you see and predict changes in an area, the dynamics of renter behavior in the region, the rise of demand, etc…, that ability help serves you in your quest for the right mix of properties for your future.
If you are new to duplex investing and wondering how to “time” the market, a good and simple reminder is that a deal is a deal if the numbers make sense. The biggest variable to understand is the context of your numbers. What was wholesale before may be retail value now. The great thing about “deals” is if you buy something at a true deal price level you are protected with margins no matter how things fluctuate.
Know your market, know your numbers in the right context, do your due diligence, and have courage. You are smarter than you think. Fear is good, it makes you think about the numbers. But after you do your homework and the numbers make sense, have some courage. If it is truly a deal, then you are probably hedged nicely.
In a few hours one of America’s biggest sporting events will take place. Based on the teams i think any football fan may see a great game with lots of offense. But how could the Super Bowl be related to duplexes in any possible way? Well its more an idea for a creative duplex investor more than anything.
If your looking for a niche for your duplex investing, how about having duplexes in areas with high volume events. When the events come along and if you have vacancy in any unit, you could provide a great 1-2 weeks short term home rental for a nice price. There are some companies that provide services with this general idea such as bowlgamerentals. As with anything like this learn the rules that apply to renting out your property for events, but by doing so it could be a very profitable idea.
As you can tell duplex.net has undergone a makeover, but this change is more than cosmetic. The new duplex allows you shop for duplex financing and duplex insurance for the entire United States, and has expanded duplex resource sections. We hope this improves your duplex browsing experience and as always we are open to your feedback and comments.
-The Duplex.net Team
If your duplex has a nice positive cash flow, that’s great, but one thing that should always be deducted from that gross cash flow is a monthly contribution to your repair expense account. Be it a plumbing issue, a roof repair or any other home repair that inconveniently pops up.
The amount deducted from your gross cash flow is a personal preference but your cash reserves should determine your monthly contribution. For example if you have liquid investments unrelated to real estate you may need a smaller cash flow allocation because you have it covered by other means. If you are more leveraged, with a smaller overall cash reserve a higher deduction is recommended.
Your duplex rental can always incur damage and having an appropriate repair fund helps avoid financial burden. The monthly cash flow on your property is not pure profit. It is monthly income that needs to withstand expenses that are unforeseen.