Real estate investing is a great way to generate cash flow, create financial independence for yourself, and achieve the elusive “passive” income that so many people talk about and wish for. However, there is a lot to know about investing in the real estate market, and that knowledge can mean the difference between discovering success and discovering disappointment.
At Real Estate 360 Pro, we provide education, tips, and tricks based on our nearly two decades of experience purchasing, selling, renting, and flipping houses and other property in and around the Atlanta area, and we can help you get started off right by providing the guidance you need to gain momentum and achieve your financial goals.
In today’s blog, we will identify nine things that you need to plan for before getting started with turning real estate investing dreams into a reality. To learn more about the finer points of these action items, get started with Real Estate 360 Pro today.
Figure Out Your Finances
There are no rules that state that you need to have a certain amount of financial success to begin investing in real estate — none at all. However, to approach real estate investing the right way — and by that, we mean the way that is most likely to help you find early success and build momentum most quickly — you do need to have a realistic view of where you currently stand with your own finances and financial responsibilities.
We recommend working to identify which of the Five Stages of Wealth you are in to help you select investment strategies, markets, and other important aspects of your real estate investing plan. If you’re not 100% sure where you stand, Real Estate 360 Pros can help you determine where to begin.
Select An Investment Strategy That’s Right For You
Determining what kinds of real estate investment strategies are right for you and your financial situation is something only you can do, but an experienced and effective real estate investor — like Real Estate 360 Pro — can help.
Investment strategies can range from focusing your own financial goals and action items to produce savings and reduce non-property-related debt to finding ways to get in on the ground level and learn for those in the lower levels of wealth achievement, and for those with more financial independence and security can involve everything from turning your own home into a rental property to getting started with fix-and-slip strategies for houses that fit your investment property criteria.
Biting off more than you can chew early on can provide significantly more financial problems than solutions while starting too conservatively can deny you the momentum and cash flow you need to feel comfortable taking your next steps.
Select A Market To Target
When figuring out where to focus your efforts, you have to decide whether to invest in a market proximal or distant from where you live. As a general rule, managing real estate investments over a distance is more challenging, but that doesn’t mean that there aren’t very real benefits to doing so depending on where you live.
On the other hand, local knowledge, the potential for strong partnerships, and your finger on the pulse of your local market can help offset some of the challenges that a strong local market might present for a real estate investor looking to get started.
Real Estate 360 Pro can help you choose which option makes the most sense for you.
Set Purchase Criteria For Properties
One of the most important things you can do to set yourself up for success in the property investment industry is to narrow down and focus on specific types of properties and a range of price points you want to work within. Over time, this can and should change to adjust to your ability, experience, and the growth and changes that will inevitably arise in the market as a whole.
To get started, consider defining two aspects of criteria for properties you want to invest in: qualities and cost.
The quality of a property includes things like location (zip code), school districts, the number of bedrooms and bathrooms, and other qualifiers such as the inclusion of a garage, yard, HOA, or another aspect of a property.
Cost is much more straightforward, but typically takes a little more research and savvy to determine in a way that helps you generate a worthwhile return on your real estate investment. Many investors follow the 1% rule, but ultimately this works better as a vetting tool than a decision making line in the sand.
Determining the amount of money that you can pay for a property depends on a lot of other factors, but with professional real estate investing guidance in the form of classes, one on one education, and coaching from Real Estate 360 Pro, you can find a formula that makes you money.
Find Your Team
The first myth of real estate investing that gets debunked when you get started is the notion that this is something you do by yourself. Successful real estate investing requires a trusted team to help with the things you cannot do (for time or legal reasons) yourself. This list of trusted team members can include:
- Advisors and/or coaches
- A Spouse
- Investing partners
- Property management companies
- Service contractors (plumbers, electricians, etc.)
- General contractors
- And maybe more
Figuring out who to work with, when to work with them, and making sure that you are seen as a person who is good to do business with are all crucial elements of successfully managing your real estate property investments.
Figure Out Financing
Whether you look for traditional FHA loans, private lenders, or even financing with the seller of a home, figuring out where the down payment is coming from is a crucial step to getting started in the real estate investing space.
While later in your journey you may be able to simply pay cash for homes, thereby getting the best deals, lowest interest (zero), and most money on your return, this just isn’t possible for the majority of people getting started with real estate investing. So, make sure to do some research, get some help, and get your questions answered about the best ways to finance your future in property investiture.
Raise Cash To Make A Purchase
Now that you have all of the details squared away regarding your financial state, your investment criteria, your team members, and where the loan will come from for new property investment, your next important question to answer is, “Where will the money for the down payment come from?” And to be honest, that just the start.
In addition to a down payment amount, you’ll need to make sure that you also can cover closing costs as well as have some money available for the proverbial rainy day — after all, unseen problems, repairs, or lack of paying tenants can quickly destroy the amount of money you are netting on a monthly basis or drive your total investment cost towards, or in some cases even beyond, what you are able to make when it comes time to sell.
There are a number of ways to get the money you need to cover all of your bases including saving, selling things of value you own, borrowing, and going into business with a partner, but not all of them will be right in every scenario, so research, discretion, and professional guidance from Real Estate 360 Pro are all advised.
Develop A Plan To Find The Best Properties
Most of the properties that you are going to buy are going to meet your criteria, and provide you with stable income and trustworthy cash flow solutions, but what you’re always on the lookout for is “the deal.” Deals are out there, but everyone is looking for them, so creating a plan to find deals means knowing what to look for and finding ways to be the first — or most effective — bee to the flower.
At Real Estate 360 Pro, we have thrived on our ability to market ourselves and let people know that we are in the market to buy their home. This can help bring deals your way, but referral programs, pounding pavement, and investing in more aggressive forms of advertising can all work to your advantage.
We recommend choosing one or two strategies for marketing yourself as a real estate investor, be it ground signs, advertising on your car, a radio spot, direct mail, word of mouth, or whatever else you can afford to test safely, and go where the success and the sales are.
Set Priorities For Your Time and Money
One of the places where we see aspiring real estate investors go wrong time and time again is in their pursuit of the actual process. Learning, developing a plan, and exploring are easy enough, but if you want a car to go, you have to push the gas pedal. Essentially, without making sure that you are prioritizing and dedicating time to your real estate investment future, you won’t have one.
Figure out how much time you can dedicate to pursuing your new venture on a weekly basis and make it the priority. If conflicts arise, find ways to move them to conflict with a less important or more stable investment of your time. In the end, this is how you go from being a hopeful to being a success story.
Learn More With Real Estate 360 Pro Today
The first step is to get the education, advice, and real estate investment coaching that you need to get headed in the right direction with help from Real Estate 360 Pro. We can help you understand your individual situation, create an action plan, and provide guidance every step of the way as you start to experience early success. Get in touch today to get started.