Real estate is one of the most effective and attractive ways to become wealthy. It promises outstanding opportunities, and more importantly, it has the ability to bring financial freedom. There is a learning curve however and if you are not prepared, and do not have the knowledge or the experience to choose the right properties for your situation, it can also get out of hand quickly. If you are just getting your feet wet in the wild world of investment real estate, I have compiled five things to know that may help you begin your foray into real estate investment.
1. Market Research.
The initial step is market research. Before making any investment, make sure you are aware of every particular aspect of your target market. Ask yourself, who are your tenants, where your property is located, how it looks, etc. Create an image of your investment in your mind and on paper. Jot down your objectives, and according to the project model, you will probably conduct comprehensive market research.
2. Make accurate calculations.
Before investing, do the math. For example, if you buy a property for $200,000, you can’t forget to calculate beyond the purchase price. Don’t forget to add in the cost of renovations that must be completed either to get the best price when you resell the property or to bring it up to date to get the best rent price on a buy and hold. Estimate the pros and cons of each option and choose the one that brings the highest profit.
3. Networking.
Networking is all about making connections and exchanging ideas. These connections present opportunities for mentorship, friendship, and even career development. Networking is a fundamental determinant of your success. You will have access to opportunities that you may not find searching on your own. Use can use social media itself to connect, or even to find meetings where you can get together with others. There are conferences, seminars, and meetings, and even striking up a conversation at your favorite coffee shop can be networking in the right circumstances. If you tend to be a bit introverted, this sort of socialization not only gives you advantages and learning opportunities in your business but can give you a boost of confidence.
4. Educate yourself.
You might assume you know enough to make your very first investment. However, don’t rush in. Obviously, you do not need to know every bit of minutia before you make a deal, but you do need to know enough that you can do your due diligence and have your strategy in place. Remember that while the deal is the key element, there are tax implications and systems that you might need to put in place before you sign that first deal. Never stop learning, surround yourself with smart people through seminars, mentors, and even books.
5. Control your emotions.
Warren Buffett said, “Only when you combine sound intellect with emotional discipline do you get rational behavior.” Many beginning investors tend to lead with their hearts and not necessarily their heads. Emotions can affect your decisions so it is important to have a plan so that the shiny things do not distract you. While emotions are natural and you can’t just turn them off you need to have the discipline to guide your decisions with facts, knowledge, and perspective.
Conclusion.
Before you run out and do your first real estate deal. Make sure that you are armed with the knowledge of what you can, and cannot control. Educate yourself so that if issues arise, and they will sometimes, you have the systems in place, the resources, and the knowledge to keep moving forward.
Invest Confidently with Shannon Robnett
By reading this blog you’ve began the first step in aligning your investment strategy with your personal financial goals. At Shannon Robnett Industries, we bring decades of experience structuring both types of opportunities, with a proven track record of helping investors build wealth through carefully vetted, tax-advantaged real estate projects.
Whether you’re seeking steady income through debt or long-term growth through equity, our team is here to help you make the right move.