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Real Estate Investing 101 – 7 Things to Consider Regarding Real Estate Investing

So you’ve heard about real estate investing you’re intrigued but, understandably, nervous. I’m so glad you’re here! I love real estate, and can talk shop all day, but I mostly love what real estate investments can do to change peoples lives. It’s an incredibly powerful tool that can free you up to do the things you really want to with your life.

In this post I want to get your oriented around how you should be thinking about this investment concept. Real estate investing is an amazing tool, but as with all tools, you need to use it correctly to enjoy it’s benefits.

Let’s dig in!

The Basics

Real Estate investing in the process of buying, selling, renting, managing, lending money, and or assignment of contractors for a profit. The system has been in existence for a very long time and it involves purchasing, owning, and renting real property with the expectation of using income from the property for future real estate investments and thereby generating a favorable rate of return on that investment.

Real Estate investments have more advantage than stock investments for a number of reasons. But at a high level it requires less initial cash, and allows you to leverage your investment to make further investments. In other words, with an investment in real estate, other people’s money can be used to increase your rate of return and control a much larger investment than would be possible otherwise.

Of course, Real Estate Investing has it’s liabilities. Some capital is required, there are other financial risks, and real estate investment property management can be time-intensive. Nonetheless, real estate investing is a source of wealth, and that should be enough motivation for you to want to get better at it.

By understanding the dynamics of our residential real estate investment marketplace, and acting in opposition to the rest of the market you can often make more money, as long as you also stick to the real estate investing fundamentals.

Here are 6 things you should consider as you think about real estate investing.

1) Form the Correct Attitude

Dispel the thought that investing in rental properties is like buying a home and develop the attitude that real estate investing is business. Look Beyond curb appeal, exciting amenities, and desirable floor plans unless they contribute to the income. Aesthetics are important, but only as they drive marketability. Focus on the numbers.

2) Develop a Goal. Develop a Real estate investment goal with meaningful objectives

Have a plan with stated goals that best frames your investment strategy; it’s one of the most important elements of successful investing. What do you want to achieve? By when do you want to achieve it? How much cash are you willing to invest comfortably, and what rate of return are you hoping to generate?

3) Learn what returns to Look for. Learn the terms and returns and how to compute them

You cannot succeed in music unless you can read music. Invest in a good real estate investing course or real estate investment software where you can learn how to run the returns and compute the formulas. Get familiar with the nuances of real estate investing and learn the terms, formulas, and calculations. There are sites online that provide great information. “Successful people do what unsuccessful people are not willing to do. Don’t wish it were easier; wish you were better.” – Jim Rohn

4) Research your market

Understanding a much as possible about the conditions of the real estate market surrounding the rental property you want to purchase is a necessary and prudent approach to real estate investing. Learn about property values, rents, and occupancy rates in your local area. You can turn to a qualified real estate professional or speak with the county tax assessor.

5) Be Wary of Get Rich Quick Schemes.

There are many so-called gurus ready to teach you how to make millions with real estate investment property. But let logic be your guide; we believe that nobody who finds a gold mine publishes a map. “A funny thing happens in real estate. When it comes back, it comes back up like gangbusters.” – Barbara Corcoran

6) Consider investing in real estate investment software.

Having the ability to create your own rental property analysis give you more control about how the cash flow numbers are presented and a better understanding about a property’s profitability. There are software providers online.

7) Create a relationship with a real estate professional that understands better.

It will not advance your investment objective to spend time with a given agent unless that person knows about investment property and is adequately prepared to help you correctly procure it. Work with a real estate investment specialist.

Feel overwhelmed yet? It's ok. Just keep reading. The fundamentals are simple, and once you've spend some time with all of this information it will start to gel.

I highly recommend you reading … and … to get more information on… and …


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Bob Walton

Broker/Advisor/Realtor® WHAT BOB DOES IN 20 WORDS OR LESS “I deliver quality below-market valued properties to investors who want to grow their RALEIGH AREA investment portfolios… on demand.” Bob allows you to focus on expanding your portfolio INSTEAD of searching & negotiating. Bob understands that buying or selling a home, business space, land development or home flip opportunity is more than just a transaction: it’s a life-changing experience. That’s his team of highly-seasoned real estate professionals is dedicated to providing exceptional, personalized service for all of our clients.

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