The real estate is a huge business with a lot of ups and downs. Many of the leading experts advise to any first-time investor is to be informed at all times to stay ahead of the game. You need to update yourself on every aspect of the business, from the mortgage rates to location to even the situation of the economy. The thing about real estate is, it’s substantial and it’s also rewarding. A lot of newbies hesitate when it comes to investing in real estate, thinking it’s too risky, with more cons than pros and a lot of people wonder how they’d be able to come up with a down payment and take on the financial burden of a real estate. And, the answer from the expert is simple, before even considering taking part in the real estate game, make sure you’ve eliminated all of your existing debt, that way you are debt free, with a high credit score, helping in lowering your future mortgage rates and also influencing the lender to offer you some competitive interest rates.
Extremely Business Savvy
A lot of the time, experts may advise people with experience in the business to invest in a fixer-upper for less than what they’d normally invest in any other real estate property and the reason is, to fix and flip. The whole idea of fixing and flipping a real estate property is no fun in the park, it’s actually time-consuming and nerve-racking but, you best believe the results and the cash influx is extremely rewarding. Only someone who is business savvy, has an eye for the job and is experienced, can work on fixing and flipping a real estate. Initially many choose a beaten-up property that has potential, it may be in a location that’s a bustling hub or it may show some promise in the future, and they buy it for pennies. They work on its repairs and maintenance with a qualified contractor and then sell it for a mint. You can see a huge difference in the investment and return of a fixer-upper, but sometimes, some miscalculation could turn that profit into a loss. Even the most experienced investor must’ve faced loss once or twice in the business and that’s okay. The important thing is to just dust it off when you fall and keep going, not every day is going to be the same.
As a beginner in this business, advice to invest smartly is to find your niche. In this market, there’s a lot of investors out there and mortgage lenders will have heard it all, what they want to hear is how unique your business strategy is and what’ll set you apart from the other fish in the sea. Every beginner has an idea about fixing and flipping but there are other strategies like wholesaling, buying and holding, getting that real estate license or working with someone to find potential deals in the local market.
Wholesaling real estate is one of the best real estate strategies if you’re a newbie, it gives you the chance to learn the ropes. You simply get the contract from a seller and then assign it to a buyer and, you as the middle-man get a percentage of the value of a property. It’s great for you if you’re starting with low capital.
If you’re one of those people who like to think about the long-run and wants to work towards invest in the business or a Housing Society, then rental properties are the best for you. You buy them, and hold them for a certain period of time and then sell. The best thing about this is, you keep getting a steady cash flow and at the end of the day, financial freedom.
Are you attached to the stability of your nine-to-five job? Why not work towards getting your real estate license? This strategy has a unique set of benefits, not only does your knowledge about the market expand exponentially, but, you also don’t have to pay realtor fees of 3% or higher when you yourself will be earning it! Getting a real estate license opens you up to more opportunities in the business with people looking for an investor-friendly realtor, thus expanding your list of buyers. And the best part of it is, your side business (real estate) could help you in times of financial hardship when your main business is going slow.
Reduce Debt and Increase Cash Flow
The secret to success in real estate business is location and keeping an eagle’s eye on the right deals, no matter what your niche is. The best way to go about finding deals is to sharpen your marketing skills and generate leads or finding potential sellers and buyers. Some ask “How should I invest for income in the real estate business?” The answer is simple, you start small and work your way up the ladder. You could start with wholesaling, and if you feel like you’ve got a keen eye for design, fixing and flipping is another great way to go about it. Buying rental properties and holding on to them is usually a step taken by those who are retiring from the business and wanting to settle down a little with steady cash flow and little-to-no debt.
The best advice I can give you is, before being a part of this long journey, try to eliminate debt, because many people get trapped in the vicious cycle of adding debt and not being able to pay it off. One thing remains consistent throughout your journey to making the best investments in real estate and that is, the more you educate yourself and are aware of all the ins-and-outs of the market, the more likely you’ll be on the path to success.