|Introduction||People get into real estate investing because they want to make money. They think they can go buy a property, rent it out and it will generate income. Buy enough properties and you can quit your day job and make millions.|
|Investment Strategies||There are many different investment strategies, each providing a different type of return and each coming with different types of different risks.|
Write A Business Plan
Real Estate Investing became a business for me when I started treating it like a business. And why not, it is a business. And just like any business, you need a Business Plan.
A Business Plan is not just something you write to show to other people like your banker, investor, etc. A Business Plan is something you create to help you understand where you are, where you want to go and how to get there. Your Business Plan will be different than other peoples Business Plan. For example, if you have lots of cash and just starting in real estate investing, you will have a very different plan than if you were broke and unemployed.
The market will determine price
When looking to purchase an investment property, you will want to make sure you don’t pay too much. My strategy is that I am always looking for motivated sellers. These are sellers that need to sell their property for one reason or another and they just haven’t been able to and they are running out of time. The major consideration for what you pay for a property will be the current market conditions in that area. Is it a buyers market or a sellers market?
It seems this industry likes to come up with all these different kind of fancy terms and makes it a little difficult for people to get involved in Real Estate Investing. Really, buy rent and hold investing is a rental property.
What they do is they call it a buy rent and hold because first of all you have to buy the property. So that means going out looking for a property that you are going to eventually going to own. Then you are going to buy that property and then once you buy the property you have it under title you actually own it then you rent it out. What that means you go out and you look for tenants and you advertise for tenants, you obviously you get the property ready.
Know What You Will Do Before You Invest
Whenever you are looking at acquiring an Investment property, you should always know what you plan on doing with it.
You need to know your exit strategy.
Your exit strategy may also include a number of things to prepare for this strategy.
Your exit strategy will also influence how you acquire properties and what you are looking for in an investment property.
I hear it all the time. “Well I want to invest in Real Estate but to do that you need to get a 2,3 OR 4 plex. I can’t make any money buying single family homes because they don’t cash flow.”
What they mean is that the cost of buying that home is so high that the expenses will exceed the rents that you can charge for that neighborhood.
Changing the Way You Live
You are the product of your society and your upbringing. You were taught at an early age to go to school, get a good education, get a good job, work hard, get married, have a family, work hard to support your family, retire and spend some time doing what you want then die.
Most people get into real estate investing not because they like real estate. Most people get into real estate investing because they want to make money. It’s that simple.
Real estate has been the number one investment that most people turn to when they are looking to diversify their portfolio.