Real estate investing has exploded in recent years. Everyday there are thousands of new investors all across the country. What many new investors fail to grasp is that real estate investing needs to be treated like a business. Much like many other businesses there are a few basics fundamentals that are needed to be successful. These are the five core areas that you need to know and understand especially as you are just starting out. Here are the five basics of real estate investing.
Join A Networking Group & Investment Club: For many, there is something intimidating about networking as a beginner real estate investor However, the reality is that this is often the best time to do so. If you want to accelerate your learning curve you need to be around people who are in the business. For those of you wanting to learn how to get started in real estate business it begins by showing up at local networking groups. You will hear from contractors, attorneys, real estate agents, mortgage brokers and maybe even fellow investors. You don’t need to add anything to the meetings just yet. If you sit and listen you can begin to develop your strategies and goals. This is accelerated even more with investment club meetings. You can bet at these meetings there are a few other people with the same experience level as yourself. The amount of education alone at these meetings makes them worthwhile but you never know if you will meet a potential business partner.
Understand Numbers & Costs: The real estate business is full of numbers. While you don’t need to be an accountant, beginner investors need to have a good understanding of where numbers in a real estate transaction come from. The first place to begin when learning how to get started in real estate Investing is by understanding closing costs. As a beginner investor, you may be surprised to learn just how quickly these costs add up. The same is the case with rehab costs. Even if you have done some contracting work there are additional costs you need to be aware of. There are also numbers involving in setting up your business, generating leads and evaluating deals. Most new investors start out with a limited amount of funds. You need to be able to allocate these funds wisely. The only way to do this is by understanding as much as possible about numbers, fees, costs and more.
Pick A Market: While most new investors have a pretty solid idea of the type of property they would like to purchase, they aren’t so sure about its location. Before making offer investors need to narrow down which markets they’re interested in. This entails conducting thorough research on the market, as well as analyzing the purchase price range, which should give investors an idea where the market is headed. Once you’ve picked a market, you’ll want to drive the neighborhood to get a feel of what’s out there. Believe it or not, there is a lot that can change in the matter of a few miles. When getting started in real estate investing, beginner investors need to pick a market and then become an expert on that area. This will enable them to confidently make an offer because they know everything about the market.
Assemble A Team: The real estate investment business is a team sport. Even though you are acting as an individual you need a support staff around you. The quicker you reach out to your team the quicker you can start investing. For investors looking how to get started in real estate investing begin by contacting a local real estate agent. Almost everyone has a friend or a friend of a friend who is in real estate. Even if you don’t you can do a quick internet search and see who is selling real estate your area. Reach out to them and explain that you are new in the business and are interested in buying investment property. You may have to make several phone calls until you find a real estate agent that fits with what you are looking to do. Next, you should start calling local contractors. You may be able to find one in your local networking groups. If not you can ask your real estate agent or your personal network if they know anyone. A good contractor is important if you are interested in the rehab side of the business. Don’t let your lack of experience intimidate you from calling. These people want to work with you just as much as you want to work with them.
Make An Offer. Once you feel that you know the business and have a team in place go ahead and start making offers. At this stage it is pretty easy to talk yourself out of any deal if you try hard enough. There is no such thing as a risk free deal. Some risk is smaller than others but every deal can have potential problems. If you ran the numbers and double checked the property you should make the offer that you feel is right. You may have to make ten offers to get one property accepted. When you do it will more than make up for all the hard work you put in.