Investing in real estate can be a very satisfying and profitable venture. Of course, that is if you avoid the many potential pitfalls and gain some experience without running into that one fatal deal that creates a serious financial problem, making it impossible to recover quickly. All property investors were new to the business at one time and while most are very savvy and knowledgeable, a little beginners luck never hurts.
Finding the right property, at the right price, and clearing a large profit on your first deal or two is always welcome for sure. However, many experienced real estate investors will tell you the most important thing you can do in your first couple of years is avoid big mistakes.
The reason is simple. If you miss a big profit, you can still carry on and find the next deal, even though it hurts missing out on a good buy. If you make a bad decision and get tied to a piece of property that is a problem, then you stand to lose large sums of money, time and it can put an end to your property investing career very quickly.
However, there is plenty of opportunity in real estate and plenty of room for new investors that are looking to get started. Below are a few helpful tips to keep in mind as you begin your journey as a new real estate investor.
Network, network, network
Establishing solid relationships with local realtors, brokers, loan officers and other investors can pay huge dividends in the long run. While many of us compete with each other to some degree, some of the best deals are found through others in the industry that you have taken the time to establish a relationship with. Other real estate professionals can be an excellent source of information and most often they are willing to help out more than you might think. Additionally, over time, you will get to know who you can trust. Sometimes entering into a deal with the confidence that you can trust what the other party has told you, is very valuable.
Don’t get emotional
Real estate can be like in cars in a certain aspect. Sometimes you come across that bright, shining piece of property with marble floors, a new roof and all brand new appliances. On the outside, it looks like a perfect diamond and you fall in love with it, which makes you stretch just a little (or a lot) more on how much you are willing to pay. After all, it looks so good it is worth it right? Well, maybe and maybe not. There is no doubt that new appliances, carpet or the like have value, however, be very careful of becoming too influenced by surface appearances.
Keep in mind, there is a reason the property is for sale. That does not mean there is something wrong with it, but there could be. Stick to your budget and stay within the price range that you came up with during your research. If the property does actually have added value, then nothing wrong with paying more, but just be sure it is real value and not emotional value.
All areas are not created equal
Do your research! Know the area you are looking to purchase property in and the surrounding areas. Small distances, corners of large subdivisions and odd city or county designations can make a big difference in the value and demand for a piece of property. Never just assume something, if you are not 100% positive of all the facts. Again, this is an area where it really helps to have established connections with experienced realtors and other investors in the area who may be able to give you a small piece of information that saves you thousands of dollars.
At realty guru llc, we are always looking to connect with new and experienced investors at all levels. First and foremost, we truly enjoy the personal interaction and have always believed if we reach out to help someone, then we have made our community just a little bit nicer. If you are looking to buy, sell or invest in property in our area, please do not hesitate to contact us with any questions you might have.
What are your best tips for new real estate investors?
Was your first property deal a huge success or a giant problem?
Tell us about your experience, we would love to hear it !