5 Ways to Maximize Your Time as a Real Estate Investor

Real Estate is an enticing investment. There are TV shows and travelling speakers which glamorize real estate investing as the path to tomorrow’s highest paid millionaires. As a result, the market is filled with a high percentage of part time real estate investors. Whether this is a part time investment strategy or you operate a full time real estate investment company, efficient time management will provide the highest level of profitability.

• 1) Have a Clear Business Plan. Real estate is like any business you want to operate, there is a lot of information that must be acquired to obtain success. Having a clear business plan will establish the direction you will go and what investment opportunities will fit into your company structure. There is the option of residential versus commercial real estate. Then deciding if you want to flip homes or hold homes as rentals. From there will you find homes at auction, pre-auction, short sales foreclosures and so forth? Each strategy entails different risks that must be managed and different strategies for acquisition. A clear business plan will allow you to gain focus and use your time effectively to find the best deals for your market specialization.

• 2) Find the Right Partners. The partners you choose will be determined by the types of homes you choose to purchase. For all investors having a financing partner, a real estate agent, an attorney and a contractor or home inspector should be among the top of your list of partners. This will provide you with essential professional advice you need to make sound financial decisions.

• 3) Utilize the Right Software Tools. Today access to information is abundant. So much so that you can get caught in the paralysis by analysis due to the sheer volume of available information. For this reason it is more important than ever to have the right website resources and software tools to manage your real estate business. Websites like MLS listings is just the start of a real estate investor’s needs. Software like Privy, LegalZoom and Real Data can provide needed tools for making investment choices. Privy focuses on locating investment real estate, LegalZoom provides legal forms and documents that are needed for investment transactions and Real Data provides investment analysis tools that guide you through investment decisions.

• 4) Understanding Portfolio Parameters. Getting the numbers right can be the single most important step to real estate investing. The above listed software can be a guide as well as the partners that are needed for success. Understanding what it takes to become profitable and making the correct assumptions will be the difference between making and losing money. Delays in the completion of renovations or going over budget with a contractor can wipe out profits overnight.

• 5) Know Financing Options Upfront. Financing investment property is very different than financing a primary residence. Many banks are hesitant to offer funding for such projects. Investors and finance companies which specialize in financing investment properties will require larger down payments and charge higher interest rates on these properties. As a result having a clear business plan is essential. Line up financing based on what channels the property will be purchased and what you plan to do with the property. It may be necessary to have initial financing that is then refinanced once upgrades are completed and a renter secured. For flipping properties the higher interest rates will have less of an impact because of the short holding period. If you choose to buy at auction funds must be available with a very short closing window. All of these financing considerations must be accounted for when choosing a type of real estate investment to pursue. Having financing lined up ahead of time is essential to success. Great property options fast as there are many investors looking for deals.

Real estate investing is an exciting way to turn a profit and when done correctly can result in higher gains that many other investment options. Using time and resources effectively will allow you to maximize gains and provide a strong strategy for acquiring and selling properties. There are a lot of resources to help you be successful. Finding partners and utilizing the right tools will give you the highest chance for success.