|
|
Real Estate Investing Basics
Basic Principles - Success in real estate can be found in solid financial principles, not quick "Quick-Money" techniques. Before you begin investing in anything, you need to have a strong financial foundation, a strong foundation consists of the following:
(to learn more visit www.ecitywide.com )
Cash Flow - Consistently sifficient.
Sufficient Reserves - 3-6 months reserves.
Adequate Asset Protection - Adequate & Affordable
Once you have these things in order, you can decide on how (and where) you want to invest. You have several different options. (Stocks, Bonds, Mutual Funds, Real Estate, Notes, etc.)
Also, it helps to be organized throughout the process. Keep good records, and have all of your information easily available. Have the following information readily available:
⌂ Personal Income Information (Tax Returns, W-2’s, Updated Pay Stubs, Etc..
⌂ Personal Asset Information (Balance sheets, and proof of assets).
⌂ Know Your Credit Information (not just the scores).
⌂ Detailed Property Schedule and Rent Roll (keep updated and detailed records on every transaction involved with that property).
3 Ring Binders Work Great!
Where do you start in real estate?
Success in real estate starts with a few basic concepts. Once you know these principles, and you follow them, you can easily succeed. First you need to understand a few basic principles (not techniques!).
- Real estate is not easy money. As with any investment there is always risk.
- If you put forth time and effort you can easily succeed. There is a lot of money to be made, but I see a lot of people get in and fade quickly.
- Know your market(s). (Know sales, rents, time on market, comps, etc).
- “Time” is a key factor. Always look at your investments as a potential long term investment.
- In real estate, things take time. It takes time to find good properties. It takes time to close on them. It takes time to rehab. It takes time to market and sell or rent. And often, it takes time to see any return at all!
- Time is a friend of the real estate investor. Over time, you will most likely make money. History shows us that.
- Time can also be an enemy. Especially when you need to sell a property quickly. There is only one word for when you have to sell a property fast, and that is cheap!
- Always figure worst case when it comes to time!
- Understand the Time Value of Money. Some times it may be better to sell a property at a slight discount to be able to utilize that cash for other investments or to avoid a future loss. Also understand the Value of Time (it varies from person to person).
- “You make money when you buy.” – Really you make money when you buy and sell, and timing is everything.
- Always have a contingency plan (Exit Strategy).
- If you cant “cash flow it” don’t buy it (or sufficient reserves to cover it)!
- Leverage is an investor’s best friend (especially those without a lot of cash). Learn to use it and you will learn to love it.
- Understand the term “Sweat Equity”. If you are an active investor this can be very valuable!
The following are some questions that will help you get things lined out for your real estate investing future:
What are you working with?
- Income (Cash Flow)
- Disposable Cash (Reserves)
- What can you afford to utilize?
How do you want to invest?
- Active or Passive
- What kind of time do you have to expend towards this?
- Full time or part time?
- Rehab
- Buy & Flip
- Buy and Hold
- Combination of All
How serious are you?
- Are you prepared to take action?
- Are things in place to take action now?
- What do you need to do to get it done?
- Who is your “team”?
Success is not really that hard. People have been making money in real estate for years. Sure, a few things have changed a bit over the past few years (for the better in my opinion), but in general the concepts are the same.
So, are you ready to learn the secret to success in real estate investing?
Here you go:
- Don’t lose money! It’s that simple. Make good decisions, don’t buy stupid, and the odds are you will succeed.
Take Action Today! Call one of our real estate professionals and ask how you can build wealth through real estate. You will be glad you did!
Call Today: 888-491-6847
Contact Us
|
|