Tips for the Real Estate Investor in You

If you are looking to buy a house, now would be a great time to buy! I am sure you have heard that saying from somewhere or another, fact of the matter is, it still stands true. The market is over crowded with foreclosures and short sales, and predictions are that many more are to come. If you have the capital to start investing in real estate, it is still not too late. However, there are a few things that you as the investor need to take care of before jumping in head first. If you have bought a house or rented one in your entire life, you have performed a business deal in real estate. It is however a different game when you are trying to make a profit in it. The good news: you really don't need a degree or any professional education in the field of real estate to make money. To be honest, I am not a real estate professional myself, however, I got into investing into real estate last year and the thought came into my mind to pass on the knowledge and my advice throughout all that I have learned so far. I firmly believe in the saying, learn from other people's mistakes so you don't have to go through them yourself.

1. Planning

It is always essential to plan something out before you start it. You wouldn't go on a road trip before planning for it, right? The same goes for investing in real estate. Planning helps you cover all your bases, but more importantly it will give you an accurate picture of where you are, where you want to be, and how you will get there. In your planning process also list the goals you would like to achieve in say, three months, six months, and one year. For example, my goal early this year was to invest in 7 residential properties by the end of 2010. Till date, I have invested in 5 and it is only July, suffice to say that I am still on track. Keep these goals close to you and review them on a daily basis and ask yourself, "What am I doing today to achieve my goals?" Your next list should comprise of a list of things you need to do to achieve your goals. This list should be divided into daily, weekly, and monthly. For example, I keep with me a legal pad in which I write down all the things I need to finish for the next day, the night before. At the end of the week, I review the past 7 days' work and see how far I have come along. Remember, these tasks should be pertaining to your real estate investing goals and not things like, get a haircut, buy birthday gift for friend, etc. Do not waiver from making these lists as it helps you map out your productivity.

2. Know your market

Knowing your market comprises of several things, first and foremost, know which area of real estate you want to invest in - residential or commercial. To make money in real estate you first need to find a good deal. Money can be lost by not doing the proper research prior to buying the property. After locating the property and getting all the information from your realtor, another tool to look at is the property appraiser's website for the county where the property is located. The site would usually provide you information like who owns the property, the tax that was paid on the property, proposed tax for the year, the loan amount that was taken, and more importantly - the appraised value of the property. This amount may vary as market conditions change, however, by looking at this number, you know if the property you are about to purchase is a good deal or not. Another way to make sure you are buying a good deal is to take a drive at different times throughout the day and evening to check what is happening in the neighborhood. Stop and talk to neighbors (if any) and ask them how they like it there? What problems they face? etc. This also helps you make a decision in buying the property. Lastly, if you are set on buying the property make sure you know what your plans are with it and take all things related into consideration. For example, if you are buying a residential property with the intent on fixing it up and flipping it. Know how much it will cost to fix it up, get quotes from a couple of contractors, find out what similar houses are selling and have sold in the recent months, and utilize all the resources that you have at your disposal BEFORE purchasing the property.

3. Team Building

One of the most important things to remember is that running a real estate investment business is not a one man show, but a team sport. The saying - no man is an island, comes to mind when I think of real estate investing. Simply put, you cannot possibly perform all the tasks that are involved in your real estate business. One of the most important team member in your team that you should scout for is a good realtor. A good realtor will share your vision and help you achieve your goals while keeping you from making bad business decisions. A football analogy - if you are the quarterback, your realtor is the left tackle keeping the opposing team's players from getting to you. Other team members that you may need to acquire along the way would be a contractor, real estate attorney, banker, insurance agent, and an accountant. In Robert Kiyosaki's book "The Real of Real Estate", Tom Wheelwright agrees with the above and even states that the above team members are best acquired through referrals. But make sure these referrals come from the people you trust. Another very important factor in team building is having a clear agreement with each of your team member and knowing what their duties are and how they relate to your success.

4. Have Fun

Yes, it is important to have fun. There will be situations where your seriousness will be needed and it is important to keep your game face on during these situations. But that does not mean you should be serious all the time and forget about the world around you. Having fun also relates to other people around you. Your team members will know that you are very serious about running your business but at the same time you are having fun doing it. The energy and good vibes that you will emit will be contagious within your team, which indirectly relates to your success.