Real Estate Investing – An Introduction, Team Building and an Exit Strategy for Profit.

There are so many individuals living paycheck to pay check living in the rat race. If you think that living pay check to pay check is fun then I you might be reading the wrong article, however, read on to find more about real estate investing. You need to get out of that I am secure mindset and do something today. Over and above the obvious employment losses we have incurred, there is always wisdom in preparing for your future and possible retirement. I believe that real estate is the best ways to become financially free and not have to worry about how you are going to pay the bills, worrying what things cost, cutting coupons, shopping at discount stores, and just being Broke! If any of these things hit home, then read on and learn how you can achieve your dreams. It does not matter if you are love real estate or know anything about it. Real estate can be an avenue for you to become financially free, so you can do other endeavors you want to do.
Real estate is a tried and true investment vehicle. In the long run real estate will, with few exceptions like the recent rescission, go up in value. In the short-term real estate values can go up, down, and make your head spin in the process. There are places like Billings Montana where historically real estate has risen around 3 percent every real consistently. With wise planning, education, experience and conservative investing strategies you can win in the real estate investment game in good economies or bad.
There are hundreds of different ways to make money in real estate today. You can buy and hold, fix and flip, wholesale, lease option, subject too, bulk reo’s or simply loan out your money. And with the foreclosure market in the real estate investing business, there are plenty of ways to make money in real estate today. All of the other options are great and can be a great way to earn profit. Buying and holding strategy should only be used when you have some good cash reserve built up first. The buy and hold strategy is used to create long term wealth through rental property and rental income. Unless you have a lot of money saved up then start in other places and work your way up.
So if you are looking to just start out in real estate investing, I would recommend that you start off wholesaling. This method is simple and uses no cash a lot of times. All you do is find a property, get it under contract for a good price, and then assign the contract to another investor. It’s simple enough.
You can use this strategy to build up your cash reserves, so that you can start buying and holding for long-term wealth. I recommend that you wholesale ten properties then buy a property to hold. Wholesale another ten and then buy one to keep. This way you will not become one of those landlords who are cash poor. You have to have substantial cash saved up to make sure you can pay for necessary repairs, make the payments if you do not have a tenant in the property and just have money if something unexpected comes up.
Last year, about 40 percent of all residential real estate sales of properties sold were to buyers who were not planning to live in the property as a primary residence.
While scooping up properties at a low price sounds like the path to riches, there are a few mistakes you don’t want to make.
But there are at least two other mistakes that can sink your bid to be a successful real estate investor
1. Exit strategy What is an exit strategy
Not knowing when, or how, to sell any investment is a big problem for most people. But there are some strategies that work when you’re investing with equities that won’t work for real estate investors.
For example, if you’re investing in stocks you can put a stop loss on the price of the investment to cap your downside losses. If the price on a particular stock falls below the stop loss price you set, the investment will be immediately sold, curtailing your loss.
But real estate investors can’t put a stop loss on downward spiraling real estate prices. And, as millions of homeowners have noticed, you can’t always sell real estate easily in certain markets or economic climates.
When people usually think of an exit strategy in real estate, they think about selling a property. But many people don’t realize that an investment property may not sell if it is vacant. A shopping center that is vacant probably won’t sell – at least not for a price you were expecting. So knowing how to value or appraise your investment property becomes important.
Some real estate investors will value investment properties based on what it would take to rebuild the property. Others will determine the value by how much cash the property makes. That is, if you have tenants, you need to determine the income those tenants generate, and then subtract the expenses of owning the property to know how much cash the property provides both yearly and monthly. In some cases the location and the land value of the real estate investment is enough to value the property pretty well. This is especially true if it close to a metropolitan area.
Others real estate investors will value an investment property by comparing it to other properties out there. Lastly, some people will use all of these methods to come up with a property’s value. For the most part, this is what real estate appraisers do.
Once you understand these valuation concepts, you can buy a small shopping center, and try to keep your costs down, rents high and perhaps make more money on the sale that another similar center that has higher costs and lower rents.
Who wouldn’t want to own the center that’s making more money All of these issues are important in owning an investment property and ultimately being able to sell it.
As part of this strategy, you also have to understand that you might not be able to get rid of your investment property when you want to. You have to be prepared for that and understand how to handle owning an investment property for the long term, through good times and bad. The current economy has proven this time and again.
Developing an exit strategy will help you figure out how to better manage your investment real estate, especially if you’re hoping to sell within a year or two of acquiring the property. And the best time to think about selling is before you even make an offer.
2. Not building a solid investing team.
Another crucial mistake real estate investors make is not putting together a solid team of professionals who can help you make a smarter investment. It is absolutely critical that you have a number of professional real estate professionals available at a moments notice in order to pull off a successful real estate investment strategy. Especially one with a profitable exit strategy.
Real estate investors need an investment team that includes a savvy agent, mortgage lender, professional home inspector, real estate attorney, tax professional (either an accountant or enrolled agent) who really understands the tax consequences of investing in real estate), a property management company (if appropriate for the level of real estate investing you’re doing) and a contractor or construction labor that can help make improvements and repairs to the property.
Not only do you need to find qualified professionals you can trust, but also your investment team should get to know each other so they work in concert with your investment goals.
If you don’t have a good team, you might find that your operating expenses are higher than they should be or that your leases are less favorable to you as an owner than other leases out there. In fact, any bad ‘hand in the pot’ can really destroy profitability.
With millions of failed businesses, sinking property values and the economy in shambles, it might seem that now is not the best time to get into real estate investing. Actually, the opposite is true There’s never been a better time to become a real estate investor. One just has to be quite careful in ones endeavors in the real estate investment business.
Prices for real estate are at historic lows, at values not seen in decades. Also, financing is relatively cheap to obtain You can get a traditional, 30-year mortgage at prices not seen since the 1950s. And the housing collapse just depends on which side you’re. If you’re a real estate investor, you can get more house for the money, especially with foreclosures and short sales.
Real estate investing is still one of the most viable businesses to be in. Where else can you buy the lifeblood of your business, in this case, real estate, that’s discounted 40, 50 percent or more of what you would have paid just a few short years ago Real estate is nearly always a good business to invest in, and it’s a mainstay of the economy. The market will always rise and fall. It just takes wisdom and patience to time your investments properly to succeed in the real estate investing business.
How Real Estate Investors Benefit From Economic Changes
I don’t have to tell you that real estate is cyclical. The properties that you once had that were worth much more will soon reclaim their value. The properties you always wanted to buy but couldn’t are probably available now for much less. And the rental market People will always need housing, no matter what the economy is, and people are always relocating due to jobs and family reasons.
Whether you decide to invest in rental properties, foreclosures, short sales, subject to or tax liens, you can always benefit with real estate investing. A place to live is a basic need, and someone will always need to buy and someone will always need to sell. Where you are in this mix will depend on how well you’ve positioned your business.
The economy and market forces always have a way of changing things. If the market is bad, people will always sell their homes, often at a discount. If the economy is good, you’ll have more people buying homes. Depending upon the services you offer, real estate investing professionals can benefit.
Bottom line, people always need a place to live. If you make sure that you meet that need as a real estate investor, real estate investing one of the most stable businesses to be in, no matter the economy.

Leave a Reply

Your email address will not be published. Required fields are marked *