Your last name doesn’t need to be—ahem, Trump—to be successful in real estate. All it takes is a bit of capital and some know-how in the industry. And while there are surely classes you can take in real estate investment, the desire to teach yourself can work just as well. Even in a bad economy, real estate investments tend to fare well, so it’s worth some mental elbow grease. The most important aspect of the business is making smart moves with your money. Read on for five financial tips for your first real estate venture.
1. Do Your Due Diligence
Nearly everything can be self-taught but when it comes to investing your own money, you want to make sure you’re doing very thorough research. Ask questions of the experts in the field. Do your online research on real estate websites and in forums on the subject. Immerse yourself in the field. The last thing you don’t want to do is plunk down a good amount of capital without really knowing how to wisely invest it in real estate.
However, it is true that too much of anything is bad, even research. As Guest Writer for Entrepreneur.com Steven Kaufman warns, “It’s easy to get so tied up in the ‘research’ phase that you never actually take action. Instead, write down specific questions you want answered or goals you want to meet before delving into the latest book/seminar/etc.” Once you do this, you can set your goals, as you don’t want to get into real estate without some tangible idea of what you hope to get back. If you’re not sure, contact someone in the know who can help, such as a financial advisor.
2. Get the Capital
This one should be a no-brainer, as you obviously can’t invest in real estate if you don’t have the money. But even if you’re not independently wealthy or simply don’t have a lot of spare resources to invest, there are options. You could take out a loan with a hard money lender that places more importance on your real estate equity than your financials and borrower credit. So if you have a lot of equity in your home or homes, for instance, this could be an excellent option for you. You can find private lenders in Arizona, California, and Minnesota to get started.
3. Remain Picky
When you set those afore mentioned financial goals, you hopefully also took the time envision what you’d like to buy. This will help you be more discerning as you look at properties. If this is just a side gig or hobby for you, you likely don’t have a ton of time to invest and might be tempted to snatch something up before you know it’s a good investment. Don’t let anyone else push you into buying either. You’ll get more adept at knowing what’s a good investment over time but particularly when you’re first getting started in real estate investment, take your time and do your analyses. On the flipside, you also don’t want to get completely paralyzed by fear, so find your happy medium.
4. Use All the Resources You Can & Widen Your Search
Don’t just use the MLS to find your dream property. Use word of mouth, classified ads, or even sites like Auction.com. To boot, don’t just search close to home, as that might not be where the greatest deals are. You might have to widen the net to get the best property for the best value. Again, this takes a bit more time and effort but it will be well worth it when find that gem you’ve been seeking.
5. Network, Network, and Then Network Some More
As with many things, real estate is often about who you know, so if you’re not comfortable with rubbing elbows, this might not be the gig for you. As this Yahoo! Finance article notes, you should consider joining a real estate club, as they “are great places to network with other investors, lenders, and repair service providers. You can often pick up helpful advice about your local market from other club members.” If you do this often enough, you might even get insider scoop on properties that are coming available but not yet listed.
Intimidated by real estate investing? Don’t be! Use these tips to be well informed, put in the time and effort, and you could be a mini mogul in no time.