You have probably heard it before, investing in real-estate is among the best investments one could make. It may sound easy, and it can be easy, but beginners would usually find out that it entails hard work initially. There are over twenty five methods of investing in real estate, and I will outline them below, however,you will need some money-at least some down payment, unless you partner with someone or have the criteria to borrow some, and you may need proof of funds unless you are buying cash, assuming that buying will be your strategy:
Assignment of Purchase Contract
Commercial Investments: Apartments; Master Leases
Lease Option Foreclosures
Preforeclosures
Rehabbing
Contract For Deed (Land Contract)
Short Sales
Double Escrow
Probate
Lease & Sublet
Tax Lien Certificates
Tax Deed Sales
Notes
Exchange of like/unlike kind/Trading
Reverse Mortgage
Sale & Leasehold
Buy & Rent
Triple Net Lease
Sell the house, lease the land; Land Sales; Buy the Land Build New Construction
Sweat Option
Rolling Option
Rent to Own
Buy low and Seller Finance
Joint Ventures
Equity Partnerships
Embarking on this venture requires knowledge which could be achieved through research, planning, hard work, finding a suitable mentor and affiliating with a few cost-effective Real Estate Investor Social Networks, and your City’s Investor Association; DO be diligent when joining a network there are many scam artists portraying to be Gurus. There are very costly investor networks and there are economical ones, bottom line is–what are you getting in return for what you are paying and is it worth it. Also, there are many books, ebooks and software on setting up your own investment business or investing in real estate.
Notwithstanding the method of investing that you finally chose or combination therof; there are common mistakes in real-estate investing which could lead to serious pitfalls, and one also has to use due diligence and preparation. Do a deal analysis to see your return on investment, and your cap rate, and do not forget to factor property taxes, insurance, water and property maintenance, lawn maintenance in your expenses, otherwise your return on investments will be incorrect and grossly exaggerated. Many Deal analysis software are available.
Before embarking on investing, it is a good idea to be familiar with the laws covering the property location. Different states would usually have different laws covering property acquisition. There are legal procedures that you would have to undergo or complete to fully claim your right to the property, dependent on the mode of purchase. Also be compliant and familiar with SEC guidelines regarding investor financing and purchasing and also the Safe Mortgage Act.
Mindset and Attitude: It may be a good idea to read some books on Motivation and Changing your Mindset to the Millionaire mindset before embarking on this venture, it requires a focused and special mindset for this business.
Attitude: Change your mindset and attitude to “now” mode — “Procrastination is a thief of time”, become a people person with an eye for details and never missing a “first on the bandwagon” so that you will not miss many investment opportunities.
When choosing an investing strategy, it would be a good idea to have several basic things in place. Those are:
A Business Plan outlining your Goals – What do you Want, Why, How Much and When, and over what period, will this be a permanent career eventually, or do you just want to make some immediate money, and, what investing strategies will you utilize.
A Motivated Sellers List; if assigning/flipping will be your option this will be a must have
A Business Email Address
A Good internet service or a smart phone; An internet map simulator like Google Earth
A Preferred and Investors Cash Buyers List
A Regular Cash Buyers List
A Lead Sheet
A Phone List
A Purchase Contract
An Assignment Contract
A Fee Agreement Contract
A list of at least three (3) Closing Companies with established relations
Optional: At Least $400 if you will be doing direct mailing cost of mailing 500 bulk letters and,
printing or making your own door hangers or flyers and/or signs for marketing(Although this is a preferred method, you can also get the same or even better results using google, craiglist, face book page optimized and driving around neighborhoods and doing your own research and bird doging(One who finds deals/Properties in exchange for a fee at or before closing).
Your investment could also provide passive income which would require you to look into houses or properties that could house a number of families. These houses could be rented out. However, like all other strategies,this kind of investment may have drawbacks since the property may end up with bad tenant or without any tenant at all, however, the gain would be worth a percentage of risk. If directly managing the homes or rental units is not your cup of tea, then you could try getting a real estate investment group. They would be building or managing the property for you in exchange of a percentage of tenants’ monthly payments.
EMOTIONAL INTELLIGENCE: Another common mistake is getting emotions involved in their first investment. Emotions may cause problems when making business decisions like prospect buyers being cut-off even though they are offering the best deal. Before you start looking for properties, make sure that the real estate team is ready.
Most people opine that they can start investing on their own, YES you can, but the big mistake is that you could save yourself many hassles, time and making more money by being in business for yourself, but NOT by yourself. A good real-estate team and mentor would surely help you move quickly towards your goal. Who do you need in your team? You would need a mentor, a virtual agent, a real-estate agent, loan officer(Unless you will be buying cash and offering seller-financing}, tax adviser, insurance agent and even an Attorney.
There are many methods that can be used for finding homes for investing: MLS Craigs List, HubZu, Expired Real Estate Listings, Back on the Market Real Estate Listings, REO Managers, Private Lenders, Hard Money Lenders and Googling, Using Facebook Optimized Page and LinkedIn, purchasing List from real estate syndication sites, or just doing your own direct marketing(this option is the most expensive) or your could explore some websites and investment books. If you want to become a Real Estate Investor you can and you could explore your options via website research and books also.
In summary, real estate investing would not make you rich overnight, though you could be rich in a few months if you use a combination or the right strategies. There are many areas, issues or real estate investments to be learned before, or, while venturing into this area. One could seek a mentor, other investors, join networks or research websites–find out how whatever the research option chosen, there is a lot to be learned. It would require your initial hard work and good marketing strategies. You would have to be mentally, emotionally and psychologically prepared for it. But when strummed in the right strings, it could definitely provide you financial stability and most important financial freedom. Freedom sounds wonder, doesn’t it? You can read more or subscribe here for more information on financial freedom.
