Four Tips For Getting Started In Investment Properties
Financial planning for most American’s is reaching an epidemic new low. The irony here is while investment strategies are not on the forefront of thought in many households; the economy is more unstable now than in decades. The importance of re-establishing a mindset of financial wisdom has got to become a priority if you expect to be financially stable in the future.
Real estate is scary to most people because they just aren’t sure where to begin. They feel extraordinary amounts of capital are necessary in order to begin in investment properties. The truth is, with a little basic knowledge, a willingness to set some financial goals, and the attitude of attacking your dreams no matter what, you will be successful.
Tip 1) Determine the type of investment properties you feel the most comfortable with. Although there are almost endless real estate investment strategies, usually people consider beginning in one of three areas. 1. Flipping- this is where you buy a property at a lower than market rate with the intention of fixing it up with mostly cosmetic techniques. After the work is complete you “flip”, or sell the property to another buyer who will probably live in the house. You would be able to buy the property at a low price because it is ugly, and with some cleaning and basic repairs, the house will again be marketable. 2. Buy and hold- Many people are essentially doing this with their own house. This strategy is a long term strategy where you buy a home with the sole intention of holding on to it for as long as possible to take advantage of the increasing value. Just make sure you buy in an area that you are reasonably sure the value’s are going up, not down or stagnating. 3. Multi family-some people buy a duplex, live in one side and rent out the other. You can buy as big as a four unit without it being considered commercial property. This technique effectively reduces you risk by spreading the mortgage over four families instead of one.
Tip 2) once you choose the type of investing, you need to focus on one or two areas at a time. You must master these areas in which you work; this becomes increasingly difficult if you are focused on too many areas at a time. Learn everything you can about the area, current home prices, what homes have sold for over the last year, what real estate agents are working the area, schools, shopping and so on.
Tips 3) build a team. Although you won’t have a full team from day one, you should add them as you can. In the beginning you may just have the real estate agents working for you by having them look up properties that fit your criteria (that’s free). As time goes on, you will want to add more people depending on the type of investing you will be doing. No matter what, it’s a good idea to hire a real estate lawyer, but you may want to have many more people. Some others may be, commercial real estate advisor, title company, research assistant, secretary, bird dogs (for scouting properties) etc.
Tip 4) last but not least, it is a good idea to get involved with others who are already doing what you are trying to do. Join your local real estate investment club, they usually meet once per month and have knowledgeable guest speakers. You will also make valuable contacts at these meetings, and many professionals offer their services specifically catering to investors. Get involved online as well. Sign up for investment clubs on line. You could go into chat rooms and ask questions to get some help from hundreds if not thousands in the community.
The overall point is that you don’t need all of the details to get started. Much of the foot-work to get started including a ton of research can be done for free. You will be surprised at how helpful many people are in this field, (everyone was new at some time). Ultimately, many investors never use any of their own money or if they do, they get it back at the closing, so get out their and build your future.
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[...] investment properties can be very rewarding both intellectually and financially. Real estate investing has a long and [...]
[...] why not use it to you advantage? In this case I am referring to the idea of starting with one property and leveraging that properties cash flow or profits to in-turn grow your investment properties [...]