It should come as no surprise that many investors want to add real estate holdings to their investment portfolios. However, real estate investing is significantly more complicated than vesting money in traditional stocks, bonds, and CDs. For brand new real estate investors without a lot of experience, the learning curve can seem steep and overwhelming.
But the truth is, real estate investing doesn’t have to be complicated, especially when you take the time to learn more about it before jumping in headlong. When teaching people how to invest in real estate, maximizing the return and minimizing risks is critical to success. Real estate investing, when done right, is among the safest and most reliable long-term wealth-building tools available.
Here are some tips to help you launch your Real Estate Investing business:
Treat It Like A Business – Always keep in mind that Real estate investing is a business. Don’t overlook the importance of having a well-developed business plan that includes all the details and expenses associated with opening and operating it. In your roadmap, set realistic goals for timeframes of one, three, five and ten years. A business plan helps assure that your real estate company is on the right track. You might also consider consulting with a legal professional to discuss business incorporation at this early stage in your company launch, as it can prove helpful as your real estate investing business grows.
Know Your Credit Score – As the case with any loan or credit product, the higher your credit score, the better the terms of the product are likely to be. Review your credit reports regularly to detect unusual activity that could negatively impact your report. Also, be mindful of your debt-to-income ratio. If possible, pay down outstanding credit card debt and other high-interest accounts as quickly as possible, to procure a healthy debt-to-income ratio. A lengthy history of on-time payments to your existing creditors is also helpful when applying for financing, so make moves to improve your score before seeking financing.
Grow Your Professional Network – It never hurts to know other people in the business! If you’re going to finance deals, connect with a trustworthy mortgage broker or build a relationship with a local bank. You might consider attending in-person or online events to build your professional network. Other people to have in your circle include realtors, home improvement experts, and associates who are happy to do business referrals.
Research Potential Markets – One of the most common real estate mistakes that new real estate investors make is not looking for properties that are a bit further away from home. Sometimes there are fantastic investment opportunities to be found if you’re willing to go beyond your comfort zone. As a new investor, you might be under the impression that you have to live a stone’s throw away from your rental properties. The truth is that as long as your rental units get repaired and are up to – or beyond standards, you probably won’t get too many service request calls from your tenants.
Explore Multiple Sources For Property Searches – While MLS listings and public records might be a smart place to start when researching for potential investment properties, technological advances have made it easier to identify distressed residences that are ideal for a ‘fix and flip’ or long-term rental property acquisition.
Don’t Stop Learning – The only way to remain competitive as a real estate investor is by learning the industry inside and out. Consider attending real estate investing meetups, seminars, online webinars, or taking real estate investing classes that cover all the issues and concerns that modern real estate investors are likely to face. Alternatively, you might dedicate time to reading books, magazines, and participate in real estate forums, groups, or online discussions.
Connect With A Mentor – A lot can get said for having someone who has ‘been there and done that’ on your side. By working with other successful real estate investors, you get the opportunity to increase your knowledge and skill in the competitive real estate investing industry. Consider joining a Real Estate Investment Group that offers support and Free REI Training to members across the United States.
Above all else, always keep in mind that the harder you work, you luckier you become! If you’re willing to put in all the time and work needed to succeed as a Real Estate Investor, the chances are good that you can make a significant impact and help the communities you serve!