If you're thinking about real estate investing, congratulations! It can be a great way to build wealth and achieve financial independence. However, as with any new venture, it's important to do your homework and start on the right foot.
Here are seven of our best real estate investing tips for new investors!
1. Don't Rush Your First Fix-and-Flip Project
It's tempting to want to dive in and get started immediately, but rushing into real estate investments can lead to mistakes that cost you time and money. It's also tempting to rush through the rehab for a fix-and-flip project to minimize costs and sell the property faster.
However, moving too quickly can cause investors to cut corners, miss critical steps, and ultimately get stuck with a flipped house that takes too long to sell or sells at a much lower price than budgeted.
Take your time to learn the ropes, do your research, and find the right property before you start flipping houses. Learn how to renovate residential properties the right way and connect with a contractor you can rely on to do the job right. By following sound strategies and best practices, you'll see better returns from your first project and look forward to your next one!
2. Have a Business Plan (Before a Property)
Just like any business, to begin real estate investing requires, you need a plan. No matter if your real estate plans include rental properties or fix-and-flip investments, start with a plan before buying your first property.
Ask yourself a few questions to build your plan, including:
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What are your goals?
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What type of real estate do you want to invest in (residential, commercial, land)?
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What is your budget?
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When do you want to achieve your goals?
Creating a business plan helps you define your investment strategy and provides a roadmap to follow as you begin real estate investing. It also forces you to think about the potential risks involved and how you will handle them.
3. Think Long-Term About Markets & Neighborhoods
When it comes to real estate investing success, thinking long-term is crucial. You want to choose markets and neighborhoods that have the potential for appreciation or are already appreciating.
Additionally, you'll want to look for markets that are growing or have the potential for growth. This could be due to job growth, new construction, or other factors. Research the neighborhoods where you're thinking about investing to gain a better understanding of a neighborhood and whether it's a good fit for your real estate investing business.
4. Get a Mentor
One of the best ways to learn anything is from someone who has already been successful at it. When learning how to start real estate investing, look for a mentor who can guide you and help you avoid making costly mistakes. Mentors can help new investors by:
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Teaching them the ins and outs of real estate investing
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Sharing their own experiences (both good and bad)
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Recommending resources like books, podcasts, articles, etc.
Network with other real estate professionals and ask if they know anyone who would be willing to serve as your mentor. You can also check out online real estate forums or social media groups to find potential mentors.
5. Focus on Numbers (Not Hunches or Feelings)
As an investor, it's important to remember that real estate investing is a business. This means that you should always focus on the numbers when making decisions about properties, markets, and strategies.
If the numbers make sense and it's a good investment, go for it! Likewise, don't avoid a property just because it doesn't "feel" right. Stick to the numbers and base decisions on facts and data.
6. Assemble Your Real Estate Investing Team
No real estate investor is an island. To be successful, you need to surround yourself with a team of experts who can help you with different aspects of real estate investment success.
Your real estate team could include an accountant, lawyer, contractor, property manager, real estate agent, and more industry professionals.
7. Start by Learning
If you're new to real estate investing, it's important that you take the time to learn about the business before jumping in. There are a number of ways to do this, including:
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Reading books or articles about real estate investing
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Listening to podcasts about real estate investing
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Attending local meetups or events for real estate investors
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Taking an online course about real estate investing
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Joining a real estate investing club or group
The more you know about real estate investing, the better equipped you'll be to make sound investment decisions.
Use Privy As a Resource to Find the Best Investment Properties
Along with these seven expert tips, be sure you have the right resource to help you discover the best investment properties and make good deals. Privy is the software tool many real estate investors rely on to find better properties in multiple markets throughout the country. If you're ready to begin real estate investing, reach out to our team to learn more about the Privy Advantage!
Get more insights into building your real estate investing team for success! Download our free resource, the "Assemble Your Real Estate Investing Team: A Worksheet."
