It’s sometimes difficult to get started in real estate when you don’t know exactly what works and what doesn’t, what mistakes to avoid, and so much more. The real estate industry is a really lucrative one, but it is also a very competitive one where you have to give your all to make a name for yourself.
So we’ve put together the methods we’ve been able to glean from my personal experiences and from talking to different investors (who each have a different approach). We are sharing with you today some of our best tips for getting started in real estate because I see a lot of people who invest in real estate and make mistakes that can cost them dearly.
1. Choose your strategy: invest your time or invest your money?
There are different types of approaches to real estate investment, which makes it quite complex. However, there are 2 main distinctions to make: doing the work yourself or investing your money. If you choose to do the work yourself, be prepared to make personal sacrifices on your weekends or evenings.
On the other hand, if you prefer to borrow money and delegate the work, the cost of the investment may be higher, and you will have to convince your bank to follow you. In any case, you will have to be clear in your choice and move forward in this direction.
2. Conduct a market study
The main goal is to know if you will have requests from tenants once you have implemented your project. To find out, do the test: place an ad on a website with the features you have imagined and photos (you can ask your friends or colleagues if you don’t have any). This is how this member did it to generate 5000 $ of cash flow with 5 apartments.
Then wait for the market to come back to see if your project has attracted people. You can then decide to continue or redefine your project. In any case, conduct your market study; the results will reassure you. Know that it is hard to project yourself in a real estate investment when you are not sure to rent at the price you imagine.
3. Don’t aim for too much at the beginning
It is much easier to start with a small apartment, even if it will not be very profitable. At least, it will allow you to get your hands on it, go through all the steps, and especially minimize the risk of error. If you made a mistake, the risk is smaller: for example, if you bought a 50 m² apartment instead of a building.
Starting with a small project will also be easier and will put less pressure on you. Once you succeed, you’ll feel more comfortable and confident about moving on to a larger project… because you’ll understand the process.
4. Get trained
In real estate investment, it is very important to be trained in negotiation, the assembly of your financing, and taxation. Many people make mistakes with taxes. There is also a lot of erroneous or incomplete information on this subject. So get trained! Master your project from A to Z to make your investment work. You have the choice between taking a training course or training yourself.
Many people start on their own. This can work if they have the desire and the time to train on their own. On the other hand, many people also make mistakes because they didn’t take the time to train: they negotiated the property wrong, bought it too expensive, or made the wrong tax choice. So, learn to invest.
Generally, even if you’ve never invested before, your first investment will be a success if you’ve trained yourself well. Many people think that it will happen naturally, but that’s just the way it’s going to happen, and you’ll make a lot of mistakes. So learn! Once you have acquired a solid foundation, you will be able to talk with confidence and understand everything about real estate investing.
5. Build a team
Investing is a sport! Investing alone is the best way to fail. So create your team! Surround yourself with people who can advise you or alert you to the details to be taken into account: investors, notaries, real estate agents, artisans, bankers, brokers…and above all, other investors like you! Of course, you’re not going to create your team before you invest, do it along the way.
You will find that your team will be built after your first or second investment. You will also find that subsequent investments will be much easier because everything is already in place. And remember to create a long-term relationship with the people you choose, people you get along with, especially competent people.
The only effort will be to find a new property and not to find people to help you. So, look for ways to create your team! Don’t be afraid to approach people you are working with for the first time and say, “I would like my next investments to be with you! I’m in this for the long haul”. This will get people more involved in your project.
Sound off in the comments section below and tell us what you want to read next and if you want to read more about starting in the real estate industry.
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