3 Things You Must Know Before Buying Real Estate Investments
Have you ever wanted to become a real estate investor?
That’s a question I am sure lots of people are asking themselves right, especially when we look around and see that some of the wealthiest people have large portfolios of real estate investments, whether that is single-family residences or apartments or even commercial space.
Real estate has always been an avenue for creating extra income as well as, really, building a financial future for your family through income-producing properties.
I wouldn’t blame you if you wanted to be in real estate right now because the market is hot. And this makes a lot of people want to jump into real estate and it couldn’t be a better time to get into real estate.
But you also may be saying to yourself that you don’t know a lot about real estate.
And there are a few things you need to know before you even start going out and looking at properties, making offers or even evaluating real estate deals. Those few things boil down to what we refer to as the three things that you must do before buying real estate.
Let’s talk about them.
- Know your market. This is crucial to your success when it comes to doing the right deals in the right area. You need to know where the markets are for rental properties; or which areas are going to be best for fix-and-flip type properties. You can do this through gathering data from a real estate agent. By knowing the market it helps you understand when you’re looking at deals how to figure the right strategy for that area. For example, you don’t want to try to fix and flip a property to sell that’s in a heavy rental market.
- Build a power team. In real estate, you’re only as successful as your power team. Your power team will have professionals – real estate agents, contractors, handymen, property managers, mortgage brokers, bankers and closing attorneys.
- A financial source. This is something that a lot of people don’t do right away, but you want to be prepared, so you want to go out and build relationships with local banks, community banks and credit unions. The local relationship is vital because they’re going to be easier to work with. They’re going to have better programs and they’re going to really want to help you build your real estate business in the local community.
From here, you can start getting the specialized knowledge for what you want to do in real estate investing. But the ultimate key is if you want to become a real estate investor, identify these three things and then move into specialized knowledge.
Now, you may ask, “Where can I find some of this specialized knowledge?”
Right?
Well, you can find it in investment books and videos on YouTube.
You can also get this information from a mentor to help you grow or, if you want to be a part of a like-minded group, you can come out to a local real estate investors association meeting.
Locally, the Madison County Real Estate Investors Association has been helping area investors for more than 15 years. The group holds monthly meetings on different topics and it might be something that you’re interested in. For a schedule visit www.joinournextmeeting.com.
I encourage you to look into that and I’m looking forward to seeing you out at one of those meetings.
(Zack Childress is president of the Madison County Real Estate Investors Association).
