5 Steps to Get into Real Estate Investing and Become a Successful Real Estate Investor
Real estate investing is a smart way to build wealth. However, it’s critical to understand how to break into the business in order to find success and avoid risks. One way to learn how to become a real estate investor is to work with a trusted and proven real estate investing coach like Laura Alamery. A guiding hand to show you the way is a huge bonus.
Educate yourself on the foundations of real estate investing before you purchase your first property. Start by understanding the different types of real estate investments. Determine the type of investments you want to make depending on your financial resources and how you want to make money.
Types of Real Estate Investments
The basic types of real estate investments are residential and commercial. Residential real estate includes single-family and multifamily homes. These properties, like with commercial, can be purchased to flip and resale or to lease for monthly income potential. Rental properties can include single-family homes, apartments, vacation rentals or other short-term rentals.
Commercial real estate can be costlier and more complicated than investing in single-family homes. However, with the proper education and guidance, you don’t have to be intimidated.Commercial real estate includes offices, retail, hotels, medical centers and any other property that is used for commercial purposes.
Understand Investment Risks
Before you start investing in real estate, understand the risks involved. Understanding the potential risks will help you to avoid major mistakes. The goal of real estate investment is to make a profit. In order to make a profit, you need to cover the property payment, monthly operating costs, taxes, insurance and any other expenses that arise. Not being able to cover these costs will mean that you lose money and could result in bankruptcy.
Other risks include vacancies, legal issues, over leveraging, renovation problems and changes in market trends. Be prepared to deal with the risks correctly by keeping an eye on all aspects of your real estate investing business.
First Steps on How to Become a Real Estate Investor
Create a Business Plan
Don’t skip this step! If you are willing to do the work to invest in real estate, take the time to create a business plan. This is your tool to define your goals, budget, marketing plan, financials and other key parts of your business.
Most funding sources require a business plan before they will lend you money for your investment. Be prepared! Plus, developing a business plan will help you view your investments as a business, which is key to success.
Locate Funding Sources
For most real estate investors, funding is necessary to purchase property. Locating funding sources is an important step for how to become a real estate investor. Two primary types of
financing are bank loans and private investors.
Finding private investors requires more work than a bank loan when you are starting out. You can network or join a real estate investing group to tap into the real estate investing market and identify funding opportunities.
Work with a Quality Real Estate Investing Coach
One solid way to start out successfully in real estate investing is by partnering with a quality real estate investing coach. Two benefits of working with a mentor or coach are to help you set realistic goals and to set you up to avoid unnecessary risks. Also, through classes and personal coaching, you have the opportunity to ask questions and gain knowledge you wouldn’t get on you own. Laura Alamery offers a variety of coaching and training options to get you started in real estate investing.
5 Steps to Success
1 – Understand the Market
If you want to start any type of business, you need to understand the market you’re entering.Consider the make-up of the area. What are the demographics? What’s the economic conditions? What types of real estate are in demand?
2 – Focus on One Type of Investment
While real estate investing offers many different types of opportunities in both residential and commercial real estate, choose one as your focus. By not spreading yourself across market types, you’ll learn and grow more quickly. You can also become specialized in a specific segment. Once you’ve figured out what works, you can then consider broadening your portfolio.
3 – Develop a Network
Relationships are key in real estate investing. It’s important to play nice and be professional when you deal with other’s in the field. You want a trusted network to support your investing efforts from inspectors to attorneys to private lenders.
4 – Continue Your Education
Don’t take one course and think you know it all. Real estate is a shifting market, and you need to stay current on laws, market trends and technology. Work with a real estate investing coach that can guide you throughout your education and growth.
5 – Hire the Right People
Just like having a solid network is important, so is hiring the right people. You need a team on your side to help you protect your investments. Find a quality real estate attorney and accountant. Also, as you grow your business hire an administrative assistant to keep you organized and on schedule.