Getting started as a real estate investor can seem like a daunting task. There are so many things to consider, so many different strategies, and so many opportunities. As an aspiring real estate investor, here are 3 steps you can take to take in order to get started on the right foot.
1. Select a strategy
The toughest part of getting started is selecting the strategy for your first investment. As part of choosing a strategy you should consider the type of investment you’d like to make. Are you going to go for a quick flip, a long-term buy-and-hold, or put together a rent-to-own deal? You should also consider the area where you’d like to invest and make sure the strategy you choose is appropriate for that area. In general, it is best to look for growing areas with a bright future since these types of areas will provide the best exit options for almost any strategy. Take your time selecting the right strategy, just don’t allow yourself to get stuck in analysis paralysis.
2. Gather your resources
Once you’ve decided on a strategy, you’ll want to pool your resources. At this stage make sure you have enough cash or liquid assets to cover the down payment and closing costs required for your particular investment strategy with some room to spare. Be sure to talk to a mortgage broker early on to determine what sort of financing you qualify for. This way you’ll be ready to pull the trigger when you come across a great deal that fits your plan.
3. Build a team
Regardless of the type of strategy you use, you’ll need some help from various professionals. Any experienced real estate investor will tell you how important it is to have a great team you can trust. Depending on your plans, in addition to a mortgage broker, you’ll want to find a real estate lawyer, Realtor, home inspector, insurance broker, accountant and property manager. Looking for professionals who own investment real estate themselves or who have experience working with lots of real estate investors will help you find the best members for your team.
Once you’ve found a strategy that works for you, gather your resources, find the teammates you need, and don’t look back. The most important thing is to just get started. You don’t need to make the deal of the century on your first deal, just find something that makes sense and get started.
photo credit: Travis Hornung3 Steps to Make Your First Real Estate Investment by Andrew C. MacDonald