Start Real Estate Investing On The Right Foot
In our recent real estate boom, as well as all the television programming surrounding
real estate investing, a great deal of wisdom has been collected about the right way of investing. The first piece of wisdom is that the grass is not always greener on the other side. Beginners are often tempted to travel to some obscure neighborhood and find a treasure where no one has looked. The truth of things is that any area that has real estate can be profitable in real estate. Someone bought the property at one point. Start with your own neighborhood. You know your area better anyway.
The next suggestion is to employ patience. If you come across a property that seems like the deal of the century, but requires immediate action, use some restraint. Make sure you do your due diligence. Have an inspector come and view the property. Look at all the options and look at it logically, removing all emotion if possible. Ask yourself questions like, "how much will the selling value increase if I add a carport to the property?"
The best advice I ever learned about investing in real estate was to run the numbers. If I had only looked at two properties and had to choose the best of two, my odds were not going to be in my favor. If, on the other hand, I look at one hundred properties, make offers on ten of them, get financing approved on five, and then narrow it down to the one I end up buying, the odds of this transaction being profitable have dramatically increased.
Learn what numbers are important, and learn those numbers inside and out. You can get a start to this by real estate courses, but the real learning comes by getting out an looking at properties. Be careful what advice you take because many advice givers have a vested interest in the property or the education. Instead of paying for advice, or taking free advice, consider developing a battle buddy relationship with another real estate investor. Your agreement will be to not step on each other's toes, but to offer constructive criticism to each other's real estate findings. They might just see something that you did not.
Understand that there are many unknown factors in real estate as well. If you expect problems to occur and plan accordingly, you will be much better off. Risk is also a big component of any real estate venture, however, really know what your true risks are and have a backup plan if things go sour. If one transaction is a failure, count it as a learning experience and keep trying, assuming you did not put everything on the line for this one deal. There will always be another deal.
by: Art Gib
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