Real Estate Investing Roadmap

Many business people believe that real estate investing is one of the safest ways to make money, protect your assets and grow wealth. Investing in real properties has many different avenues, creative financing and various ways to diversify. The majority of new real property investors tend to start off buying single family homes because this is what they are used to. A real estate investing roadmap can be easier because these new investors generally understand how to finance and maintain single family homes.

Let’s start with the first piece of the roadmap and that is capital. There are many people who say that a home is the most important asset one owns. However what they leave out is the amount of capital needed to make it work. In general real estate investing in investment property often requires 30% down payment, which means 70% of the property is financed. So, if the property is $200,000, you are still putting down $60,000 with the majority of the home being financed.

Another component of the roadmap is learning about the market. Seminars are a great way to not only learn about real estate investing, but also about what are the best areas to invest. Many seminars are put on my brokers and some institutional lenders. Yes, their goal is to sell you on purchasing, but if you keep an open, yet cautious mind on the information, you can quickly deduce the best areas in which to invest. You should also double check their sales pitch and do your own offline research.

A great deal making opportunity in the real estate investing roadmap is to find motivated sellers. These are pretty easy to find right now, especially because of the market downturn. Foreclosure and short sale opportunities do exist. The best thing to do is to find these buyers BEFORE they become owned by the bank (REO). Although banks are pretty open now to give great deals on properties they own because they are not in the business of owning real estate.

Understand your market is a lesson your parents and my parents told me over and over again. If you just buy property without regard for location, local market dynamics, title ownership, etc., you will get burned. It doesn’t matter whether you are getting a great deal on a property; there are many external factors that can affect your ultimate sale. So make sure you know where you are buying and why defects there may be physically and on paper.

Your real estate investing roadmap should also include hiring a broker… and make sure they are reputable. The job of the broker is to help you wade through the above title, market dynamics, etc. And, generally speaking, you do not pay the real estate broker. They are paid by the seller. So, it really is a win for you as a buyer.

Finally, once you’ve decided that you’ve found a great opportunity, move on it. Chances are if you found a great deal, there will be others willing to move quickly as well. You should make sure you have all your ducks lined up ahead of time. This is especially true today since there are so many properties on the market due to the financial meltdown.

So, a real estate investing roadmap is key to finding success in real estate investments.

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