How Do I Get Started In Investment Real Estate?
The first step is to determine your financing. How much can you afford to spend on your first property? You should have, at least, a minimum of $30,000 to make a responsible real estate investment, along with authentic sources of financing that ensure your closing capability for any properties put under contract.
Many people think that to get started in real estate investing they need to attend a bunch of seminars to gain some sort of expensive and secretive education. While, admittedly, there are some excellent real estate education providers available, it’s advisable for you to consider whether the money should be used as a down payment for your first investment property. The knowledge gained through personally conducting this transaction could prove more valuable than education received at seminars. Often, the lessons in these seminars revolve around hypothetical investment techniques that, while they may sound fantastic on stage, they are not proven in reality.
Many people go through education because they feel unprepared and afraid to take the first step. Overcoming that fear should be one of your first priorities, and jumping right into your first investment is the only way to do this. Keep in mind that if you’ve invested in an education of any kind, this investment should be considered a 100% loss if it is never applied.
What is a distressed property?
A distressed property is a home that is typically sold under fair market value. Most distressed properties are in need of some type of repair, but could also need to be sold fast due to the seller facing a situation such as a foreclosure or a divorce, and they are willing to accept a discount.
Traditional financing is typically a bad fit for distressed sales due to the speed at which the seller is interested in selling and the condition of the property.
How do I know if a certain investment property is a good deal
Being able to tell whether or not buying a particular wholesale property is a good “deal” or not is something that you have to be able to judge for yourself. In this instance, good judgment comes with experience.
Our expert Agents will supply you with a packet containing all recently sold properties similar to the subject property. The information we provide you with is based on repairs, and while reviewing the information, the investor must understand that there are a variety of different factors that can change.
Before buying a property, it’s critical that you do your own, independent research in addition to the information we provide you in the packet. It is recommended that you base your decision on the information you gather from multiple sources and do not limit yourself only to the information provided by Real Equity Acquisitions. Access to your own comparable sales information from the local MLS provider is critical and can be obtained either directly or from a real estate agent contact. We believe that all investors should follow their own good judgment based on their knowledge and experience with the real estate market.
How do I evaluate an investment property?
There are five simple steps to evaluating a property. Make sure you know what investment strategy you are going to use before you start.
- Determine the rehab cost.
- Determine the ARV based on comps.
- Determine if this property will meet your investing goals (buy/fix/sell, buy/fix/rent, or your own, unique investment strategy).
- Determine expected days on the market based on comps and market conditions.
- Evaluate the potential risk. Are there any unusual circumstances that may prevent the sale of this house for its estimated worth, or renting it quickly at the appropriate price? Once you have all this information, you can make an informed decision regarding whether or not to purchase the property.
For more information, contact us.