All About Real Estate Investing
From what to do with the home to what goes into real estate investing, this is your complete guide
A lot is still unknown about real estate investors.
Despite the popularity of shows like “Flip or Flop” and “Property Brothers,” many people still have trouble finding answers to their questions.
“What do you do with the property when you get it?”
“What goes into real estate investing?”
“How do you become an investor?”
These are just a few of the more popular questions people ask about real estate investing.
With help from various sources around the web and a real estate investing expert whom we reached out to, we will answer your questions and hopefully lift the confusion about the industry.
What to do with the property when you get it
This is perhaps one of the most popular questions, and one that each investor will tackle differently.
Thomas Green, an investor in Denver, says the most important factor is buying the property or building that fits what you do and want to do. If you buy properties or houses that don’t fit your strategy, you will struggle.
“You have to make sure the price is right,” Green said. “For me, I like to buy houses that are trashed. I like to replace everything. Everything is new and the buyer gets back the value. Plus, you can make more when you do this.”
When you get the property or house, it’s a matter of doing everything you can to make your schedule.
As Green said, “Time is your money.”
“You need to have crews in place,” he said. “You need to know who will work for you. It’s so important. You need that crew to pull that together for you. You need them to work fast and efficient.
“For me, I usually have a dumpster out in front of the house on the closing date with a crew that goes in to clear the house out right away. That makes the house barren, cleaned out and ready to get worked on.”
The timetable for Green is usually three weeks to three months. Ideally, he likes to have the homes done in six weeks.
“But sometimes it goes three months,” he said.
There’s usually one reason that happens, and it’s out of the hands of the investor.
“The problem comes when it’s ready to sell and you don’t get the price you want,” Green said. “So you have to ask more than its worth to get a profit. Only a few times have I seen people had to stop in the middle of the process. That doesn’t happen very often.
“It just comes back to buying right at the beginning of the process. Getting the right price to where you can make a profit.”
What goes into real estate investing?
Everyone thinks they’re an expert.
Look no further than real estate for proof.
The latest “Can’t miss guide to make you money fast” seems to come out daily.
If you haven’t realized yet, real estate is extremely competitive.
People always are looking for any way to get an advantage over their competitors. When the market is crowded, you need a way to stand out to make people pick you out like Waldo in a “Where’s Waldo” book.
Some feel the best way to do that is to create a guide or “how to” seminar.
But if you take these five strategies to market yourself, you will stand out.
Let’s call it our “How to become a real estate guru for dummies.”
First, get involved in your community.
Want people to know your name? To know who you are? Get out there.
Partake in community events.
When you have a job, hire local companies.
Over time, people will start to remember you and come to you with their business.
Move to the cutting edge of listings by doing them with video marketing.
Numbers show when you add videos it increases sales, which means more money for you and more interest in your brand.
Before everyone else starts to realize this, get in on it now.
You also need to have a strong web presence.
That means a functional, easy-to-use website; social media outlets; and email newsletter.
No longer do people find homes through the classifieds in the newspaper. They search for properties, listings and real estate agents.
If you have those three aspects mentioned above, you’ll move to the front of the line.
One way to get even more people to bring their business to you is to promote yourself and the company.
When you first start getting out in the community, you probably shouldn’t bombard people with ad material.
Prove that you’re human first. Develop your name and trust, then build upon it.
View it like the construction of your home.
Before you put up the frame and start the construction of your home, you first need the foundation.
Once you lay the foundation of making yourself recognizable in your community, then you start to build from there with gifts like branded T-shirts and pens. Put up billboards. As Sunday Bell suggest, create a branded lip balm.
Whatever you do, make it so your brand is noticeable.
Lastly, focus on your local demographic.
You know better than anyone the people you want to serve.
All of the suggestions noted above will help you get to this step.
You will then be able to better market for those customers.
You will know what works.
If becoming an expert is your goal, this will get you started on the right path.
The best thing about it? You didn’t have to pay $300 to learn this information.
How to become an investor and what is it?
Real estate investment is a complicated field where a lot of money changes hands.
If you do this, don’t go in half way. Go all out and give yourself the best chance to make money and expand your portfolio. Don’t expect “competitors” to take it easy on you.
Real estate investing is no joke.
Not when it comes to this much money.
First on the guide is understanding the market. Before you do anything, decide what you want out of this.
Do you want it to be a side project?
Or do you want it to kill?
Once you decide that, know all you can about the subject.
Research real estate, and then research it some more. Then, research it some more. Real estate is “an interest in land” and anything attached to that land. That means buying and selling land and buildings.
Per Wiki How, there are two types of interest at play in real estate: owner and leasehold.
Owners have control and leasehold you pay to eventually own it (unless you pay rent).
The most common form of real estate investing is purchasing ownership in a property and then earning money from tenants. Unless you get into wholesale, but that’s a different topic for another day.
Once you get an idea of how it works, you have to decide how much risk you’re willing to take.
Anytime you get involved with investing, there is risk.
There two types of markets in real estate investment: private and public.
Private involves the purchase of an ownership in “real” property. You then make money from tenants, for example. This is the most direct way to invest in real estate since you are responsible for the property.
The other is public, and that involves purchasing shares of a publicly traded real estate company. This is the less direct approach, and the more risky of the options. Often these companies take the form of investment trusts where you buy shares on the market and get paid dividends in return as the trust collects capital.
The last way to become a real estate investor is to decide between equity and debt. As the Wiki How page says, both the public and private markets operate on equity and debt.
As an investor, you decide what you invest in of those two. If you invest in debt, you lend money to someone so they can buy interest in a property. You earn money in the form of interest payments on a mortgage.
If you invest in equity, you invest in the ownership of the property. That means you take control of the operation of the land and buildings.
After these three steps, go back over what it is you want from this endeavor. Decide how much of your own money you’re willing to put into this, or put a team together.
Now that you got an idea of what it takes, put these guidelines to good use.
Go make some money.
It’s not that easy
What you see on TV with real estate investing is not reality.
It’s like watching the NFL and thinking everyone who plays quarterback does so like Peyton Manning. That’s not how it works.
The same is true with real estate investing.
If you do this, to get to the point of “Flip or Flop” takes a lot of work and time. It won’t just happen.
Hopefully this helps you get a better understanding and answers the main questions when it comes to real estate investing.