Getting started with real estate investing can be challenging if you do not have the right team and strategy in place. This is the foundation for a flourishing portfolio.
When you invest in real estate, you are not only building wealth for yourself, but you are also creating a financial legacy that can be passed down for generations to come. This legacy can give your family a sense of security for their future. As a new real estate investor this can be both challenging and exciting, so here are some steps you can take to help you begin your journey into real estate investing.
Educate yourself before you start. Before you make any decisions you should take the time to learn about real estate investing. Reading books, listening to podcasts, and following reputable real estate professionals are great ways to get started. There are great resources available for investors at any level on forums like BiggerPockets. Joining an investor group like those run by the Buckingham Investments team. Learning from others is another great way to build knowledge.
Set goals and define what you want out of your investment. Are you looking for cash flow, tax advantages, or long term security? Once you define what you want out of your real estate investment you can determine what type of properties you want to invest in (i.e. vacation rentals, multifamily, a flip, or commercial properties). Having clear goals will help guide your investment decisions. Finding and working with a real estate professional who specializes in investments can help you evaluate properties and potential deals.
Understand your local market. Each market is different and nuanced and that is why it is so important you are informed about the market you are looking to invest in. Learn the expected return on an investment (ROI) in those neighborhoods as well as potential appreciation of that property. Being close to amenities, transportation, parks or a downtown area will make a property more desirable. Once you decide on a property make sure to conduct due diligence during your inspection.
Assess your finances and establish a budget. Once you determine how much you can invest, figure out how you will finance your purchase. There are various financing options available, such as traditional mortgages, private lenders, hard money loans or partnerships. Every loan type has its own set of guidelines, regulations and benefits. Make sure you understand the terms and conditions of your loan.
Real estate investing takes time and effort to get started, so be patient and avoid rushing into a deal you are not completely sure about. Do you research and stick to your investment criteria. If you are informed you will make disciplined decisions. Like any investment, real estate comes with risks but if you educate yourself, stay committed and understand your market you can find financial success as a real estate investor.