| You've heard that investing in real estate can be very | | | | that area. It is much easier to find a house for a buyer |
| lucrative. Before you get started, here are seven | | | | than it is to find a buyer for a house. |
| questions to ask yourself. | | | | Do you want to take calls from the buyers? They call |
| 1. Is this a hobby or a business? | | | | at all hours, while you are having dinner, before you |
| Ask yourself why you want to invest in real estate. | | | | wake up in the morning, when you are driving to work, |
| - Do you want another income stream | | | | etc. Are you willing to drop everything you are doing to |
| - Do you want to build equity in a house | | | | take a call from a buyer? |
| - How many sellers and buyers do you want to speak | | | | 4. Where are you going to get the money? |
| with each day/week/month | | | | This is one of the biggest concerns of all real estate |
| - How much time do you have to invest in real estate | | | | investors, where to get the money. |
| - Are you working a full time job | | | | Yes, you can buy a house with little of your own |
| - Are you retired looking for additional income | | | | money. Some of the techniques to do this are: |
| - What do you want to do with your time? | | | | - Buy the house subject-to the existing mortgage |
| If you want to build a real estate investing business, | | | | - Have the seller carryback the financing in the form of |
| then you need to treat it like a business. | | | | a note |
| Are you going to be a landlord? Then you need to | | | | - Lease/Option the house |
| determine how much time you want to spend | | | | You can also build relationships with other people who |
| collecting rent, maintaining the property, making repairs, | | | | have money, such as |
| answering tenant calls late at night, etc. | | | | - Private lenders |
| Or have a property management company handle the | | | | - Hard Money Lenders |
| tenants and maintenance? Then you need to | | | | - Mortgage Brokers |
| determine who you will hire to manage your property | | | | The biggest money concern that you never hear |
| and how much you will pay them. Typically a property | | | | about is where to get the money to market your |
| management company will charge one month's rent to | | | | business. You can buy a house subject-to the existing |
| locate a tenant and then charge 8%-10% of the | | | | mortgage. But how do you find that house? You have |
| monthly rent for collecting the rent and answering all | | | | to continue to MARKET, MARKET, MARKET. |
| calls from the tenant. You still need to set aside a | | | | Marketing costs money. That is what most of the |
| reserve fund for maintenance. | | | | gurus forget to tell you. You hear all about how you |
| Maybe you don't want to be a landlord and you want | | | | can buy a house with no money down or little money |
| to wholesale property. Then you need to develop a | | | | down. What they don't tell you is that you have to |
| buyer's list of buyers who have the cash to purchase | | | | spend money on marketing to find the house, and |
| the house. You will still need to work with sellers to | | | | money on marketing to find the buyer. |
| locate properties, get it under contract. You then need | | | | Before you get started, put together a marketing plan |
| to get your wholesale buyer to sign the assignment of | | | | so you know how much money you need to get |
| contract. And you have to make sure you follow up | | | | started. |
| with the closing agent to make sure the deal is funded | | | | 5. Do you want chunks of cash or cash flow? |
| by the wholesale buyer and the deal closes. You will | | | | What is the reason you want to invest in real estate? |
| get your assignment fee once the deal closes. | | | | Are you interested in getting chunks of cash? Cash |
| Here are the questions you need to ask yourself. | | | | Flow? Or Both? |
| - Do you want to be a landlord | | | | What you want out of real esate investing will help you |
| - How much time do you want to put into real estate | | | | determine what type of real estate investing you want |
| investing | | | | to get into. |
| - Do you want to build a business or just make some | | | | If you are looking for chunks of cash, you have a |
| extra money once in a while | | | | couple of choices. Consider wholesaling or rehabbing |
| 2. Do you want to work directly with sellers? | | | | (fix and flip). |
| There are many investors who want to get into the | | | | If you are looking for cash flow, consider landlording, |
| real estate investing business who don' t have prior | | | | selling a home with seller financing, or be a private |
| sales experience. Yes, you can call homeowners | | | | lender. |
| directly and negotiate the purchase of their home, it is | | | | 6. Where do you want to invest? |
| possible. It's even easier when you are speaking with a | | | | Many investors will start out in their local market |
| motivated seller. I mean a seller that is really motivated | | | | because they are familiar with it and they already |
| to sell, not someone who wants to sell, wants full price | | | | have some relationships in the area. It's easiest to start |
| for their home and just doesn't want to wait for the all | | | | local since you are familiar with house values and have |
| cash buyer that will pay retail price. | | | | access to local experts to answer your questions. |
| Are you someone that wants to help these motivated | | | | 7. What is your plan to learn more about RE investing? |
| sellers? Do you have it in you to hear their stories over | | | | The most successful real estate investors are those |
| and over? Some of these sellers will break your heart | | | | who keep up with the changes in the industry and are |
| and you will want to help them. You have to make | | | | constantly learning new techniques. |
| sure that you only work with those that you can help | | | | One of the best things you can do is find a local |
| and make a profit for yourself. Just because someone | | | | mentor, someone who is making money investing in |
| is willing to deed you their house does not mean it is a | | | | your local market. Ideally they should be investing in the |
| good deal. | | | | area that you are interested in. If you want to |
| Think about a situation where the seller has two | | | | wholesale properties, find a local investor who is |
| mortgages, judgments, and liens on the property. Yes, | | | | wholesaling properties. Not only will you ask them to |
| you can work this as a short sale and get the liens | | | | mentor you, but they may buy some of your |
| removed and negotiate with the lender to get a | | | | properties from you. |
| smaller settlement for the payoff of the mortgage. | | | | If you are interested in commercial real estate, then |
| You need to decide if you want to put in the time and | | | | you shouldn't spend your time with an investor who |
| effort it takes to negotiate the short sale and get the | | | | deals only with single family homes. |
| liens removed. I have seen investors in the short sale | | | | Always continue to learn about Real estate investing. |
| negotiation process with the lender for anywhere from | | | | There are many gurus that travel the country teaching |
| 2 months to 18 months. Do you want wait months to | | | | real estate investing. Ask the people at your REIA |
| close the deal? | | | | whose products they have purchased and whether or |
| You need to decide if you want to work directly with | | | | not it helped them in their business. |
| homeowners or have someone handle this for you. | | | | First determine the niche you want to work to get |
| 3. Do you want to work directly with buyers? | | | | started. Learn everything you can about that specific |
| Once you have a house under contract, it is time for | | | | niche and create income in that niche before you |
| you to find your buyer. The best thing you can do is to | | | | move on to the next niche. Don't get distracted by the |
| build a buyers list before you have a property. Find out | | | | "shiny ball" syndrome. |
| where the buyers want to live, then go find a house in | | | | |