Top 7 Ways to Get Started in Real Estate Investing
By Jonathan Kostyra
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Many people would love to get involved in real estate investing but simply do not have a common sense guide to do so. There are many books and how-to-guides available with lots of rather confusing and complicated information on how to get started in real estate investing. The following simple and practical steps can get you started and off to a good start investing in real estate:
- First, decide "why" you want to invest in real estate.
When you decide "why" the "how" becomes much easier. Once you decide "why" you want to invest in real estate, you will have a clearer vision and understanding of what you want to accomplish.
Many real estate investors are seeking appreciation, a positive cash flow or income stream, others are seeking a short term flip, tax shelters, and many more are ultimately seeking financial freedom. Decide "why" and the "how" becomes clearer.
- Choose your investment vehicle.
Are you looking for a quick flip with instant equity? If so, you may want to head to the local foreclosure auction, tax auction, or have your local Realtor searching the markets for you for properties with equity.
Are you seeking appreciation? Again talk to Real Estate Brokers about which areas are experiencing the most demand and hottest growth. You may want to purchase a home, condo, or commercial property in a growing area, then lease it out for income, and wait while it appreciates.
Are you looking for a positive cash flow? Then you may want to invest in commercial or residential properties that can be or are currently leased. Again talk to the local real estate experts (Broker and Real Estate Agents) about each vehicle and decide which investment vehicle is most appropriate for you.
- Start saving a little extra cash each month for investing.
It is no secret, real estate costs money and usually with a little money as down payment.
You may want to setup a separate savings account just for real estate investing purposes. Saving is not that hard if you discipline yourself. Cut back on eating out, pass on the next latte or mocha, work a few extra hours, etc. It is not that hard for a motivated and disciplined person. You may want to setup a real estate investing club with a few trusted friends to pool your savings.
- Understand the power of "leverage."
One of the amazing things about real estate is that you can invest other people's money and even use other people's time for YOUR benefit.
There are many mortgage lenders and bankers just itching to loan someone money with a decent credit score and a decent income. There are many more real estate agents and real estate brokers who would love to show you homes and properties as long as you are prequalified and ready to buy. You can use their time, expertise, and their money for YOUR benefit.
- Talk to "several" mortgage bankers and get pre-qualified or pre-approved.
Pre-qualified or Pre-approved is real estate jargon for someone that is approved by a banker or loan officer for financing. If you tell any given real estate agent or broker that you are pre-approved or pre-qualified to buy a home or commercial property, brokers and agents typically see this as a "green light" and are ready to show you properties.
- Get out there and start looking!
Many highly experienced real estate investors will look at anywhere between 20 and 100 plus properties before making an offer. Typically these investors will make numerous offers on the most attractive properties. Some offers are not accepted while other others are. You simply can't fail doing this. Someone will eventually accept your offer and you may end up with the deal of a decade. These deals are out there but again you have to look at many properties to locate such deals. As one experienced real estate investor put it, "the deal of a decade comes around every few months."
- Make Offers!
Once you have found properties that fit your investment criteria, then make offers. It is not difficult. Your real estate broker or agent can write up the offers for you, or you can call the owner yourself if the property is not listed with a real estate professional.
The more offers that you make, the greater the chance that one will be accepted. One strategy is to low-ball sellers until you find a seller that is willing to sell at your terms. This happens rather frequently in the real estate world and you can become part of it by simply not being afraid to make offers.
Jonathan Edwards Kostyra, Jonathan is an e-Pro Realtor at
Open House Realty in Greenville South Carolina,
Mobile 864-525-0736. Jonathan specializes in investment opportunities in
Greenville SC Real Estate,
Downtown Greenville Condos, and
Lake Keowee Real Estate.
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Article Submitted On: November 24, 2007