If you’re considering being the Warren Buffet of real estate you’re going to need a few profitable ideas.
Here’s 5 initial steps you need to consider to start you on your way to success.
1) Have a Complete Understanding of Your Market
Educate yourself by talking to as many real estate agents, lenders, title reps, and other investors. Keep track of market trends and what other investors are doing in the area, as they may impact your investment. Watch/listen to as many videos or podcasts that you can stand and read as many blog post as possible…NEVER stop doing this in your investing career.
2) Choose The Asset Class You’re Most Comfortable With
Many beginning investors like multifamily because at some point they’ve likely rented an apartment and that makes it somewhat more relatable. Don’t be afraid to take a look at office, retail, or light industrial investments. Try to match your investment goals with the type of asset class you’re most comfortable with.
3) Choose Your Strategy
Are you going to buy and hold, flip or reposition? Choose the strategy that best aligns with your investment goals. Determine what your investment horizon is. Even if you plan on keeping the investment forever, you should still have an exit strategy.
4) Funding Your Investment
Know where your money is going to come from, investors (if you have investor friends and family or professionals that know the investment vehicle LLC or Corp), cash, or bank financing. By studying the debt markets, you can make additional investments and create a higher rate of return. If possible, use the power of debt to increase the returns you’re looking for.
5) Find Your Investment
Finding your investment can be a daunting task but if you have followed the above advice it’ll be a bit easier. Having a real estate agent can be a good way to find your investment but not necessarily the only way, you can also start reaching out to owners of the asset class you want in the area you desire. Just be sure when you get your property in escrow you have someone taking care of your best interest.
These five tips are good way for you to get started. Just remember to not be overly anxious to get your investment purchased. It takes patience to find the right deal.