Don't over-renovate
It's okay to budget. Pay attention to what the comps in your neighborhood are doing. You don't need the most expensive countertops and fixtures. You need everything to look nice and modern! Be on par or one step above your competition in that particular neighborhood.
Don't over-leverage
If your tenants stopped paying rent during this global pandemic, would you be able to afford the mortgage, taxes and insurance on your own? If the answer is no, you're over-leveraged. Each property should have ample cash flow. Cash flow will help you to afford unexpected vacancies and repairs. If you're making at least $500-$1000 per month after all your expenses are paid, you can weather a 20% decrease in rents due to a recession. You also have plenty of room to stash away a percentage of this monthly cash flow into a reserve account.
Expect to exceed your budget and timeline
Whatever you're budgeting for renovation costs and time, add at least 10% extra to your budget and 30% in extra to your timeline. If you don't go over budget and your project wraps early, that's great. But by planning for overages at the outset, you can account for it to see if the purchase and the project still make sense.
If you can't negotiate the price, try terms
Typically when making offers to buy properties, buyers only think about price. But sometimes, terms are important. You can limit the inspection contingency to structural and environmental only. You can have a sooner closing date, limit appraisal and financing contingencies.
You make your money when you buy
Your purchase price is the main factor that determines your profit later on. You can't rely on an appreciating market. The key to finding good deals is to look for properties that are listed way below market value, like a property in need of repairs, in foreclosure or perhaps the seller is just really motivated to get rid of a property!
More tips...
If you're looking for some more insight, here's how I analyze and make offers on multi-family houses! Here are the steps I follow to successfully close on an investment property.
Here's how you can finance your purchase and renovations using hard money. And finally here's how to keep your budget down by negotiating lower bids with contractors.