Become the Jedi Master of Property Investments
In a galaxy far, far away… You can become a real estate entrepreneur in no time.
Actually, that galaxy isn’t that far away. It’s right in front of you. And with a little bit of blood, sweat, and tears (plus some help from the Force), you can become the Jedi Master of property investments.
Now, where do you start? Real estate investing doesn’t follow a “one size fits all” approach, so deciding the path you want to follow in the beginning is important.
Choose What Type of Property Investment You Want
Real estate investors typically fall into three main categories:
These types of investors are essentially marketers. A wholesaler contracts a property (usually distressed) and then quickly turns around and sells it at a higher price to another investor, making a profit in the process. Many new investors start out in wholesaling to learn the business.
These are the investors you typically see on reality TV shows, also known as “fix and flip” property investors. Just as the name suggests, this method involves buying a property in need of repairs and renovations and fixing it up to sell for a profit.
3. Buy and Hold Investors
Buy and hold gurus are the real Sith Lords of real estate investing. These types of investors buy a property (or several) and leverage them for steady, long-term income. Some advantages of these investments are steady cash flow, appreciation, and equity.
Now, Padawan, you’ll need a few pointers to understand property investing.
Know Your Property Investment Market
1. Understand how to analyze properties
This skill is essential in the world of property investing in order to avoid losing money. Understanding how to analyze a real estate deal is crucial. There are a number of factors to consider when analyzing a deal and potential of a property:
- Evaluate comps
- Understand taxes inside and out
- Run assorted scenarios
- Forecast future prices and rental rates
- Consider the worst-case possibility
2. Understand all the costs that come with flipping a property
- Rehab expenses
- Holding costs
- Transaction costs
- After repair value
Establish Key Relationships
Becoming a successful property investor involves building a strong network of relationships to utilize for all your business dealings. Trusted partnerships make the process much easier.
● Insurance Reps
● Property Managers
● Real Estate Agents
● Other Property Investors
● Title Agency
● Certified Public Accountant
A Few Tips For Getting Started with Property Investments
Wait for the right opportunity
It certainly will be tempting to take one of the first deals you come across in your journey to Jedi Master level investing. Don’t jump in before really assessing if the deal is worth it. Don’t allow emotions or desperation to drive poor investing decisions. Wait for the right moment.
If you come across a lousy deal, just remember – “These aren’t the droids you’re looking for.”
Stick to the fundamentals of property investments
Indicators like mortgage and lending rates, median home prices, number of properties sold, market supply, and economic strength are all part of a fundamental gauge that can help you assess the strength of a deal. While none of these indicators alone should ever drive your decisions, they should help you make logical judgments when investing.
Train with a master
There are a number of ways to gain knowledge and experience in property investments. Books, professional seminars, courses, and YouTube videos are all ways to gain traction in real estate investing. Look at your network and see if there are any opportunities to actually work with an investor and gain valuable training
And above all else, remember the words of Master Yoda – “Do. Or do not. There is no try.”