Taking Baby Steps To Real Estate Investing
Building Blocks To Real Estate Investing
Welcome to the league of Real Estate Investing. We will be taking a step by step approach to the building blocks needed, to spear head your real estate investment activities. The topics covered will include fundamental information as real estate laws and regulations vary from state to state. Real Estate Investing has it's priviledges, but it also has it's risks. Investors can make money, but they can also lose money. Those interested in Real estate investing should seek the advise of licensed lawyers, accountants, and other needed professionals in the area(s) they plan to invest.
Ready! Set! Go! Real Estate Investing
Getting Started With Your Real Estate Activities
Making the decision that Real Estate Investing is an activity or business you would be interested in doing is the first step. The fact that you are exploring this topic demonstrates interest. Taking the first step from a casual observer to an active participant in real estate is the hardest hurdle to get over. Start by setting up a practical plan for yourself; that includes specific, timed, and measurable goals. Each goal that is set should include specific strategies (activities), that will help you measure the accomplishment of your stated goals.
Spend some time identifying reputable sources o f information, education and training, resources, professional support, and financing for your planned real estate investment activities. A good starting point could include the National Real Estate Investors Association (National REIA). They have local chapters available around the nation, and some offer free first time attendance at their meetings.
Also plan a visit to your local tax office, city or county tax/record recording offices to familiarize your self with real estate regulations and laws in your area of investment activites. This may help you decide what type of a business structure or corporation to set up for your investment activities.
No matter how modest your plan, the important thing is to get started.
Getting Organized For Real Estate Investing
Purpose To Get & Stay Organized
The best thing you can do for your personal life and real estate investing activities, is to get organized and stay organized. This will help you stay focused and feel on target with your investing plans. We discussed the benefits of establishing a written plan, with clear goals, objectives, and strategies. The use of a planner can add further organization to your real estate investment activity. Select a planner that matches your style and budget. Planners come in many shapes, sizes, and formats. Some planners are paper, others are electronic; some come with caculators, maps, and other useful tools. Select a planner that you will be comfortable using.
Establish your working space. This may be an actual home office, a room, a quiet corner, or your kitchen table. This designated area should be reserved for your real estate investment activities. All of your working materials should be within reasonable reach. This would include your files, telephone, office supplies, books, forms, contracts, and other needed materials.
Office equipment should be located in your designated work area, or within reasonable reach. A dedicated phone system with voice mail capability is a must for every investor. Many people are opting to use only wireless telephones. A landline or wireless telephone that is dedicated to the business is fine. Computer equipment and real estate software will enhance an investors ability to conduct their activities.
Computers can also be accessed in public libraries free of charge. Other equipment that will enhance your ability to organize your investment activities are a fax machine and printer. Depending on an investors budget, these can also be accessed in the library or business service center. A digital camera, or cell phone with camera will also be an important tool in conducting your real estate activities.
Taking the time and effort to get organized and stay organized, will go a long way in helping you to achieve success in your real estate investment business.
Batter Up! Building Your Investment Team
Establishing Real Estate Investing Resources
Building a successful wealth generating system can not be accomplished in a vacuum. You will need to work with others as you build your real estate investing buisiness. Take time determining the major and minor players you will need to make your team productive. Write down team building goals, objectves, and strategies. Establish basic criterior for adding a real estate professional or associate to your team.
Some things you will probably want to consider when building your resource team are experience and the person's willingness to work cooperatvely with you. There are seasoned real estate professionals that are not open to assisting new investors. They may only be willing to use traditional investing strategies. It would probably be best to move on, and continue interviewing and interacting with other real estate professionals. The key factor you are looking for is "a good fit". Do you connect well with this person? Follow your gut reaction, if the contact interaction feels right, give the relationship a try. If it does not work out, you can adjust your team composition accordingly.
Identify and write down in your plan, the team members you will need to make your real estate investment business a success. Establish a list of the things you are looking for in the relationship with each member of the team. In determining your list of criterior, it may be helpful to review standards of practice for the different real estate professionals.
Identify Recruit Your Team Players
Selecting Real Estate Professionals & Advocates For Your Team
There are some basic real estate professionals and resource associates that every real estate investment team should contain. As an investor you may care to also identify unique team members needed to create your dream team. I will start with the basic players neeeded for all teams.
Real Estate Agent - Working with an agent will give you access to a large data base of properties, and access to someone experienced with real estate requirements in your target area. This does not prevent you from pursuing "For Sale By Owner" (FSBO) properties on your own. When interviewing real estate agents, note if they are willing to provide you with information on available properties that match your investment goals. Ask them if they can provide you with comparables on properties of interest. Comparables are other properties in the area, with similar specifications, and will show you the selling price of those comparable properties. Ask if they would be willing to show you properties, and help you write offers on properties of interest. Let the agent know that you are serious, and would be interested in a long-term association. A motivated and flexible real estate agent will be pleased to work with you, and will be excited about the opportunity to increase their bottom line (profits).
Mortgage Broker - Establishing a sound relationship with a mortgage broker will help to assure you have the needed capital to fund your real estate investments. A mortgage broker has financial connections with traditional lending companies and non-traditional lenders. They have connections with other investors willing to offer private money and hard money lenders. A good broker will be familiar with strategies designed for people with credit problems or limited personal funds. When interviewing a mortgage broker, ask them if they have worked with other investors, if they know of available investment properties, if they offer !00% financing to investors, and other related questions.
Funding Resources - Establishing a personal war chest of financial resources would be invaluable for any real estate investor. This could include personal savings, lines of credit, credit cards, family or friends loans, and other sources of personal funds. Private money lenders are an important resource for real estate investors. Building a financial war chest will help to keep you stable in your investment acquisition and portfolio maintenance efforts. Will expand on the concept of establishing your financial war chest using no cost or low cost strategies.
Real Estate Certified Appraiser - They will provide a formal report of the properties value in it's current condition, and an estimate of the value of the property after needed repairs are completed.
Home Inspector - A professional home inspector will provide a report on the overall and specific condition of a property. They pick up defects that are sometimes overlooked, that can greatly diminish an investors profits. Select a home inspector that you feel comfortable with, and one who will speak to you and not at you. Go with the home inspector, and familiarize yourself with the inspection process.
Certified Public Accountant (CPA) - They can assist you in managing your income and expenses; help you decide on a business structure that meets your goals; and assist with protecting your assets and limiting your liabilities.
Real Estate Attorney - A competent lawyer is needed to protect your real estate investment acquisitions and activities. Review of contracts and your activities can prevent costly errors. Lawyers also assist with the closing process in some areas. If you are planning on renting property, a lawyer will need to be experienced in tenant and landlord laws and regulations.
Title Company - Finding a good title company will assure that your real estate closings go smoothly. Title companies bring all the pieces together like arranging loan payoffs, completing title searches, getting the contract signed by all parties, and transfer the title. Once you have interviewed and selected a title company, you can nuture the association by visiting them and allowing them to close your real estate deals.
Property Management Company - If you plan to be involved with rentals, a property management company can help with the management. For a set fee, they can find you tenants, collect rents, deal with problems such as evictions, do repairs and maintenance. Interview a few companies, compare their fees and services. Gauge your comfort level in dealing with them. Determine if they have their own repair team, as this will save you money.
Establishing Cost Effective Financial Resources For Real Estate Investing
Building Your Financial War Chest
Assuring access to financial resources is a real estate investors most challenging responsibility. The three most common methods of financing one's real estate deals is using your own cash or credit, or other people's money. Many investor's lack available cash or credit to finance the deals that come their way. The cost of using other people's money can be expensive, particularly if hard money lenders are utilized. Traditional funding from banks and other financial institutions, can be costly as well as beyond the reach of many investors. So what is an investor to do? Why not build your own personal financial war chest, using no cost to low cost strategies.
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Expanding and Individualizing Your Real Estate Investing Team
Building Your Unique Team
A real estate investor may find that they need advocates and associates that may or may not be considered professionals on their team. Connecting with other investors in real estate investor clubs is a valuable source of support. Opportunities can abound in these settings for profitable real estate buying and selling; access to investment funding; real estate training and education; and networking and peer support. The National Real Estate Investors Association (NREIA) provides a network of real estate investment groups that meet locally around the Nation. Involvement with investment clubs is optional, but would probably strengthen a real estate investors team.
Having personal support from a trusted family member(s) or friend(s) will also help to strengthen and individualize your team. Some investors have carved a role into their business activites for their children or other family members. Familiarizing yourself with tax laws on hiring your children and other employment regulations, will help to assure smoother operations of your business.
Each investor needs to decide which players will constitute their unique real estate investment team. Focusing on the goals and objectives set forth in your plan should assist the real estate investor in building their team.
Time Out For Reflection On Action Steps - Evaluating Your Real Estate Investing Activities
For those who have decided that real estate investing is an activity they would be interested in pursuing, it is important to get started. Certain basics have been covered that are a starting point for an investor. Time required to act on any of the areas covered would depend on the experience level and self-motivation of the lens viewer. Individuals viewing the lens could be totally new to real estate investing. Some may be very experienced, and already have some or most of the topics in this lens accomplished. Please take a little time to reflect on your action steps or level of experience currently and as we cover additional information in this lens. Post to the poll or poll comments section would be appreciated.
Have you implemented any of the real estate investing strategies mentioned in this lens?
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