Most new real estate investors all seem to have one critical element missing straight out of the gate when they start investing. That is the real estate investor's mindset. Allow us to break this down into a few simple things every new real estate investor needs to understand.
This is business, nothing personal. Having the real estate investor mindset means above all else, you understand that what you are doing this as a business. That means you must look at this with none of the emotion that you attach to buying real estate for your own personal use. This is not a home that you are buying for yourself. This is merely a property that you are investing in to use to benefit your retirement, or perhaps using it to develop the available financial resources to send your children to university.
Don't make any emotional purchases. You are not looking for your dream home but instead an investment. Do not fall in love with any particular property. All of your real estate purchaes should be looked at from a bottom line perspective. Shop as if you're going to give the property to a family member. By shopping as if you were going to give this away to say your children as their first starter home, this means you need to evaluate a few things that will assist with the eventual sale of the property.
Most new families are looking for real estate in locations that have good schools, good shopping, easy access to major freeways, low crime rates, as well as a myriad of other services and potential personal meets. Observe the surrounding areas of any potential purchase. Are the streets clean? Are the yards and the other homes well taken care of? Do you notice graffiti? These are things that you must factor into looking at future "curb appeal" for the property. Things that will assist with the eventual sale of your invested property.
Educate yourself. Every good investor works on developing his education. Not just of real estate transactions or real estate investing purchase options, but of the most important details involved in real estate investing. The details that simply help you understand what needs to happen to achieve a sellable product in the shortest amount of time, and in the most financially responsible way.
If you don't have a construction or contracting background, then you must have a concept or understanding roughly of what the remodel and/or repair costs may be per square foot for the investment property you are considering. If you are looking at an older home, find out what the overall cost to do any update work is. What is the cost to do any possible plumbing or replacement of electrical? What would it cost to replace the roof?
Now while this education may work or you may have the understanding of the costs in your area. What happens if you invest outside of your immediate area? For example, will a handyman in Dallas, Texas cost the same as a handyman in San Francisco? For example, what are zoning laws from state to state for your type of property? What are the permits required to do a room addition in San Diego vs a room addition in Oklahoma City? The investor's education is the most the important tool they have.
Understanding investing is a team sport. Real estate investing has always been a team sport. The largest investors in the country have dozens and dozens of people that work for them. Donald Trump has a staff that spreads into hundreds of personnel. No one that is serious about investing can do it alone. There are certain people that you must find and have on your team. Take everyone in on a trial basis. Use real estate agents; they will know the best deals/best properties available within your area. A good real estate agent is worth his weight in gold. Don't try and arrange real estate purchases on your own. Especially if you are considering a purchase out of your immediate local area of expertise. You will need to find a team of appraisers, groundskeepers, contractors, plumbers, electricians, and quite possibly a "handyman." The reason for finding all of these various professionals is to have them on call should you find that property and have the available funds to pick up, hold, and refurbish/remodel the property and sell it. Understand that your relationship with these individuals is as critical if not more so than finding the property yourself.
For additional information on Real Estate Investment, go to www.RealEstateReport.info
This is business, nothing personal. Having the real estate investor mindset means above all else, you understand that what you are doing this as a business. That means you must look at this with none of the emotion that you attach to buying real estate for your own personal use. This is not a home that you are buying for yourself. This is merely a property that you are investing in to use to benefit your retirement, or perhaps using it to develop the available financial resources to send your children to university.
Don't make any emotional purchases. You are not looking for your dream home but instead an investment. Do not fall in love with any particular property. All of your real estate purchaes should be looked at from a bottom line perspective. Shop as if you're going to give the property to a family member. By shopping as if you were going to give this away to say your children as their first starter home, this means you need to evaluate a few things that will assist with the eventual sale of the property.
Most new families are looking for real estate in locations that have good schools, good shopping, easy access to major freeways, low crime rates, as well as a myriad of other services and potential personal meets. Observe the surrounding areas of any potential purchase. Are the streets clean? Are the yards and the other homes well taken care of? Do you notice graffiti? These are things that you must factor into looking at future "curb appeal" for the property. Things that will assist with the eventual sale of your invested property.
Educate yourself. Every good investor works on developing his education. Not just of real estate transactions or real estate investing purchase options, but of the most important details involved in real estate investing. The details that simply help you understand what needs to happen to achieve a sellable product in the shortest amount of time, and in the most financially responsible way.
If you don't have a construction or contracting background, then you must have a concept or understanding roughly of what the remodel and/or repair costs may be per square foot for the investment property you are considering. If you are looking at an older home, find out what the overall cost to do any update work is. What is the cost to do any possible plumbing or replacement of electrical? What would it cost to replace the roof?
Now while this education may work or you may have the understanding of the costs in your area. What happens if you invest outside of your immediate area? For example, will a handyman in Dallas, Texas cost the same as a handyman in San Francisco? For example, what are zoning laws from state to state for your type of property? What are the permits required to do a room addition in San Diego vs a room addition in Oklahoma City? The investor's education is the most the important tool they have.
Understanding investing is a team sport. Real estate investing has always been a team sport. The largest investors in the country have dozens and dozens of people that work for them. Donald Trump has a staff that spreads into hundreds of personnel. No one that is serious about investing can do it alone. There are certain people that you must find and have on your team. Take everyone in on a trial basis. Use real estate agents; they will know the best deals/best properties available within your area. A good real estate agent is worth his weight in gold. Don't try and arrange real estate purchases on your own. Especially if you are considering a purchase out of your immediate local area of expertise. You will need to find a team of appraisers, groundskeepers, contractors, plumbers, electricians, and quite possibly a "handyman." The reason for finding all of these various professionals is to have them on call should you find that property and have the available funds to pick up, hold, and refurbish/remodel the property and sell it. Understand that your relationship with these individuals is as critical if not more so than finding the property yourself.
For additional information on Real Estate Investment, go to www.RealEstateReport.info
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