Why is there so much interest lately in real estate investing for beginners? Because as word spreads that the real estate market may be recovering somewhat, many people are scrambling to get in on the low interest rates and favorable buyer's market before it shoots back up to a seller's market.
While this is likely to take more time than most people realize, this is a good time to make real estate investments if that interests you. Whether you want to purchase a second home for your family, buy rental property, or start flipping properties, you have to know the best way to get started before you make a move.
Getting started in real estate investment always starts with education. You have to know the ins and outs of the industry today, since everything has changed in the past fifteen years. You have to learn about all of the financing options, what lenders are looking for in investors, and what types of investments turn the best profits. You also need to know how to analyze and inspect properties to ensure they are good investments.
There are tons of resources out there that offer this information, but don't spend too much time or money on this step of the process. Every time you learn something new, take the time to put it into action. You will get nowhere without action and the goal of education is to drive action.
As you start learning about the real estate market, start forming a plan for your own investment activity. Decide whether you want to hold onto property and sell later, purchase foreclosure homes and fix them up for a flip, or start a rental company. Once you decide this basic direction, you should start learning about that aspect of the business and continue putting a detailed plan on paper.
This plan should include solid ideas on the type of properties you want to purchase, how much you can afford to invest in them, and where they should be located. You should have an exit plan in place so you know exactly where your payoff for the investment will come in. run this plan by a professional or two so they can help you spot any weak points in the plan.
Finding industry professionals that you can get solid information from is important, but very difficult. You have to come to them with a solid foundation of knowledge so you know if they are giving you accurate, complete information or if they may be steering you in a direction that would somehow benefit their own goals.
Don't trust everyone you come across, even if they are highly accomplished in the real estate investment field. Learn from them, but keep your mind open to other alternatives. How one person made their money isn't necessarily the way you will ideally make your money.
Once you feel confident in your plan, start getting all of your ducks in a row. This means ensuring you can get the financing you need or learning how much you might be pre-approved for in a traditional loan. If you plan on using some sort of alternative financing, start learning how those deals are established and scouting out homeowners who may be interested in those deals. If you need to bring up your credit score or get an increase in the down payment fund, find those things out now and start putting it all together.
Once you have everything together, it's time to find that opportunity and make the move. You have done the hard work. Now it is payoff time.