If you want to get into the real estate investing business but don’t know how, this post is for you. It’s easy to be overwhelmed before you start investing in real estate and being a landlord. You’re dealing with a lot of unknowns. I’ve pulled together 7 steps to help you get started in real estate investing:
Be specific. Don’t have a goal like “make a million dollars.”
To accomplish this, I set S.M.A.R.T. goals:
Here is an example of a S.M.A.R.T. real estate investing goal: Gross $100,000 in the next year by brokering 10 foreclosure transactions valued at $10k a piece.
There are many options when getting started as a new landlord. Do you want residential real estate, single-family residential, or multifamily?
There are certainly significant pros and cons for the two types of properties, you need to do research and decide which one is right for you.
Interview lenders to understand what you need to buy a rental property. It’s important to find out what lenders want to lend on the type of property you plan to buy.
Many real estate investors get a deal and then scramble to find financing. But, it’s better to secure financing first and then look for a deal.
If you can’t get funding from a traditional lender, try using a private lender. Private lenders are individuals with cash that will lend to real estate investors. Because this is a private transaction, there are literally hundreds of ways to structure this deal. Private lenders typically charge a high interest rate because of the increase in the risk.
You might want to talk with other real estate investors about forming a joint venture with them. They can put up the money, and you make a percentage of the profit each month. What you’d do for them would be to find a great deal, manage renovations, get a quality tenant, and manage the property.
You won’t make nearly as much money as you could if you owned the property, but you won’t have to put up any of your own cash or take on debt. This method gains you great experience with real estate investing.
If you work in the Long Island area, I would be happy to partner with you on real estate deals and flip projects. Learn more and get in touch with me here.
Where do you plan to buy property? Make sure you have researched the area as much as you can. Look for the following:
These are all factors you need to consider when investing in real estate. If you don’t weigh them carefully, you’ll buy a bad deal.
How exactly do you plan on finding good deals?
Below are some options:
This is where the rubber meets the road and a lot of investors stop. It’s easy to research and get stuck in “analysis paralysis,” but nothing will happen unless you make an offer. Don’t be embarrassed to make a low offer. The worst that could happen is the seller will turn it down.
If your offer is accepted, have an inspection contingency. That way, if you need to back out for quality issues, you can.