A Novices Guide To Real Estate Investment
Real Estate was, will be and still is the best investment tool to date and if you’re getting into real estate for the very first time, here is a piece of advice you may find very crucial to your success.
? Only buy real estate today that can be sold tomorrow for a profit, literally.
? Every piece of real estate should be considered an investment, even your first home.
For many years real estate investors have made Hugh profits from buying and selling, buying to rent or building new developments and in almost every case making the right decision by analyzing thoroughly the potential of that investment and acquiring the knowledge needed is what sets them apart from others.
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In this article we’re not going to discuss legal issues like tax, planning and the sort of tenants you should be looking for, rather we are going to discuss common sense approaches to real estate investment. But the issues not being discussed are very important and should be discussed with your attorney and your accountant.
One of the best ways to start your investment career in real estate is to build a network of professionals that you trust and can count on to come to your aid when an opportunity presents itself. To start off, your bank should be on the top of your list, having a banker who understands your intentions and knows that he/she can trust you to go out and find deals that are sound and profitable for yourself and the bank will be willing to work with you under less strict circumstances.
The second most important part of your network is your partner base; these are the folks with the money, the cash you need to get the project off the ground i.e. down payments, having a base that you can rely on is paramount to the success of your real estate investment, even if you have your own cash it’s wise to bring in other investors into large deals, tying up your cash will not be of any benefit in the long run.
Other parts of your network will include builders, accountants, suppliers and to some extent property management agents, unless these are areas you are good in, I suggest you leave these to the experts, but maintaining a good understanding of what is happening will make a Hugh impact on your profit.
As you know profit depends largely on cost control and a good investment strategy will be the key to your success, don’t cut corners, employ the right people to create your support group, leave tenant issues to your management agent, leave the task of repairing and fixing to your builders, leave the legal issues to your attorneys, if you bog yourself down in these areas of your investment career, your effort will be less successful.
Based on some of the areas we’ve covered above, I do not want to give the impression that it’s ok to have a hands off approach to your investment, but rather encourage you to look at the bigger picture, while it might appear that your profit is going into areas that you could have handled, how long would it take before you start feeling the strain of dealing with so many task that could have been left to others in your network to handle while you focus on building your empire. Many investors will tell you that one of the most stressful parts of real estate is dealing with tenants. Keep the big picture in mind.
One of the reasons why real estate is the perfect investment tool in my opinion is due to the fact that we all need somewhere to rest our heads, somewhere to call our home whether or not we’re renting or own our home. Another good reason is the fact that it’s tangible, meaning it’s there we can seen feel it admire it, take pictures of it, in comparison to the stock market that creates millionaires every day, it also drives millions to become suicidal, one minute you have a hundred thousand in your portfolio and the next minute it’s gone and watching your lively hood disappear on a screen right before your very eyes is no easy feeling.
For those investors who like the idea of large rewards available in real estate investment, a sound strategy and a good network is the key to achieving your goal, learning from other people’s mistakes including yours is also a major part of your development, you should also note that this method will take time, it will require patients, you will not become a millionaire over night.
If it was that easy every Tom, Dick and Harry would be millionaires.
In this article we can’t discuss everything there is to know about real estate, but if you use this as a guide it will help you with the fundamentals of real estate investing while you continue to acquire all the necessary knowledge you need to become a successful investor in real estate.
Here are a few ideas that you can use to start building your empire
? Foreclosures
? Fixer Uppers
? Rehabs Lease Options
? Lease Purchase
? Rent-to-Own
? Tax Liens Tax Certificates
? Tax Deeds
? Buy and Hold
? Commercial Real Estate
? Multi-family Apartments
I would recommend that you make it your business to become an expert in your chosen area, and only buy investment property that has equity as soon as it changes hands. If you purchase a piece of property today, by tomorrow you should have some sort of equity in that property.
Only Buy Investment Property That Has Equity As Soon As It Changes Hands.
Anyone who has paid any attention to real estate would have heard the phrase “No Money Down” and while many people believe it’s the catalyst for lots of bad investments, let me just say that the same bad rap that snakes have been given, it has also been given to this method.
Lets quickly discuss this method here and let me just say that for many beginners the no money down technique will be their starting point. What is no money down? And how can it apply to your effort, well for starters is can mean two things, the first has to do with the network of partners that we discussed earlier on in this article where your partners come up with the cash while you do the ground work.
The second applies predominantly to distress properties where a motivated seller is willing to give you or lend you the down payment as a second mortgage so that you can secure the property on paper with the bank, and the argument with this is based on the fact that if your hard earned money is not tied up in the property, you’re less likely to feel emotionally tied into it and the risk of foreclosure is much higher than someone who has something to lose. You be the judge and jury on this one.
One other area that I would like to touch on is Location Location, Location, it’s very important that your properties are based in sound areas or areas designated for rejuvenation, a property in a bad neighborhood will be your nightmare directly from hell.
Well here it is and before I end this article let me just say that real Estate was, will be and still is the best investment tool to date.
It’s simple as that