A surprisingly large number of people tell us that they have considered real estate investing, but have just never taken the leap. Here’s some information for them and anyone else who is considering it, but is not sure about the process. It can be boiled down to just a few simple steps, and anyone can do it. Call us when you are ready to make the leap!
Thinking about getting started in real estate investing? Here are the seven basic steps that will take you through the process. All of these steps will be easier with an experienced Realtor on your side.
1. Education – Read a few books. Dig around online, read blogs, google the topics you are interested in. Interview current investors.
2. Choose your niche and strategy – Your niche is the kind of real estate you want to buy. This might be single family, commercial, duplexes, apartment buildings, multifamily units, etc. Your strategy is how you will make money. Will you flip, buy and hold, wholesale?
3. Create a plan – Make your roadmap. This is what is going to keep you on track. Maybe start with your personal budget. When you save enough for the down payment and still have some cash reserves, plan for when you will make your first purchase, and then how long you will hold it or when it will be rented. A good mortgage professional can help you with the financial plan, so be sure to talk with someone during this stage to see what is possible. (Contact me if you would like referrals to professionals who can help you.)
4. Find a property – Here’s where it gets fun. Most likely you will want to work with a real estate agent during this stage. Your agent will need to know exactly what you are looking for. You should have a clear idea of your criteria at this point. Your agent can provide feedback and help with the search, and then head out with you to find the property that meets your needs.
5. Pay for investment – How are you going to pay? You established that when you created your plan. Maybe the bank comes in here, although some people use cash or investors. Plan on needing at least the down payment in cash.
6. Marketing – The type of marketing you do will depend on the type of investment property you purchased. If you are flipping, have a plan in place for marketing to sell. Your real estate agent can step in here. If you are holding the property to rent, you will advertise it for rent. You may choose to let a real estate agent or property management company take care of this for you, or you may elect to do it on your own.
7. Get paid – Flipping? Sell and move on. Renting? Get a reliable renter in to pay the mortgage and expenses for you.
Wash, rinse, and repeat. You’ll follow these same basic steps whether you are working on your 1st investment property or your 50th.