Real estate Investing:
Intro: As the US is seeing the hottest real estate market in years and income is rising in certain sectors and declining in other sectors. More and more people want t become Millionaire Investors
- Tend to your personal finances first
Many prospective investors view real estate as a means to get out of financial trouble. Many real estate “gurus” will advocate this practice and even use it as a selling point to sell their latest and greatest real estate investing system. I am definitely not of this mindset.
- Choose a strategy.
There are many ways to make money in real estate investing. You can buy a property and immediately flip it for profit. You can buy a property and hold it banking on an increase in value in the near future. You can buy a property for rental. You can buy a distressed property and make improvements. There are countless ways to make money. The important thing to remember is that each of these strategies carries its own set of “rules”, if you will, for making a profit. Some might say you should never limit yourself to one strategy and I whole-heartedly agree in the over all realm of your real estate portfolio.
- Do your research
While this may sound elementary, it’s very easy to get caught up in the emotion of what seems like a good deal and in the process act hastily. Always, and I mean ALWAYS thoroughly investigate a property before you sign anything. Try to determine if the property has suffered any significant damage, find out if the property is in a flood plain, find out if there is more than 1 lien against a property, etc. Create a property inspection checklist up front and check every one off before you decide to do a deal.
- Stick to a budget
Decide what you can afford and are willing to spend on a real estate deal and DO NOT deviate. Many real estate investing coaches will tell you not to let a good deal go just because you don’t have the money. “Get creative” they say. While I do not shun the idea of creative financing completely I certainly don’t recommend it for the beginning investor. “Zero Down” deals can be very appealing but they also can increase your risk factor tremendously. In a nutshell, if you can’t afford it, it’s not a good deal.