Effortless Real Estate Investing in Six Easy Steps
New to real estate investing? Or have you been playing the game for awhile now? Either way, it’s never a bad idea to regroup every now and then to re-identify just why you wanted to get into the game itself in the first place!
Investing in real estate has many “moving parts,” if you will. It’s not just about price or location or rentability. It’s less about granite countertops and more about cash flow. After all, most people don’t set out to buy a new family car and come home with a front loader! The following six steps are sound advice for anyone interested in real estate investment, new or seasoned. After all, a little reminder never hurt anyone…
Step 1: Determine Your Needs
Your needs aren’t your neighbors, your brother’s or your spouse’s. They’re your and yours alone. Before you being investigating potential investment properties, you’ll want to be clear on exactly what your needs are. How many properties do you wish to hold? Must the all cash flow positive? Where are you willing to own property? Will you own out-of-state property? What is your budget for acquisition and monthly/annual maintenance per property? Can you afford to hold a property in a down market?
As you go through this tick list, it’s likely you’ll realize some other questions are out there that need answering before you start your shopping.
Step 2: Work With a Real Estate Professional Specializing in Investment Buyers
I simply can’t stress this enough. Working with a real estate professional who specializes in investment property buyers brings a much-needed skill set to the table. They understand that there’s a delicate balance between all of the elements in an investment or rental property purchase: finances, aesthetics, geography, holding period, current portfolio holdings, historical rental data, walkability, rentability, vacancy rates, available buyer liquidity…the list goes on. Not only that, but there’s a high likelihood that the professional just might be an investor themselves and constantly on the lookout for property that fits an investor’s bill. They’ll also probably have a reliable list of complimentary professionals such as property management firms and insurance agents who can move you from the role of “involuntary landlord” into that of “real estate out”
Step 3: Be Ready to Walk Away
Real estate investment is a business. Nothing more, nothing less. Therefore, in every business situation, you have to be prepared to walk away from the table. If negotiations on price and seller concessions go south, if an inspection report comes back unfavorable – be ready to walk away and onward and upward. There’s another deal down the road and if there are obstacles preventing your desired property from being a simple to acquire portfolio holding, you’re probably better off looking at other options.