10 Tips for New Real Estate Investors

excerpts of article written by Ethan Roberts, was originally published on Auction.com.

Many investors today want to add real estate to their investment portfolios, but they don’t understand the complex nuances of real estate investing or how to begin the process. Real estate investing is substantially different from investing in stocks, bonds, and CDs, and it can seem overwhelming to brand-new investors.

When I teach people how to invest in real estate, my philosophy is to maximize return while minimizing the risks.  When done correctly, real estate investing is one of the safest and best long-term wealth-building tools in the world. With that in mind, here are 10 tips to help you successfully launch your real estate investing career.

1. Real estate investing is a business.

2. Check your credit report 

3. Find a good bank or mortgage broker 

4. Determine the best areas to look for properties

5. Talk with other investors about local real estate

6. Consider multiple sources for buying properties.

7. Spend time reading about real estate investing

8. Find a good Realtor to help you locate properties

9. Look for a return greater than 1 percent per month of sales price

10. Learn from the best. 

Above all, remember that like anything else, the harder you work and the more effort you put into your real estate investment business, the greater your ultimate reward will become over time. 

FAQ

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  • Jane Yeatman

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10 lethal mistakes for real estate investors

 

 Once the market starts to rebound, investing in real property also becomes a more appealing idea -- either as a career or a great side job. Like any other endeavor, though, there's a right way and a wrong way to go about it.

Bankrate spoke with established, full-time real estate investors and with professionals, such as bankers, to identify the types of traps into which real estate investors most often fall.

 

 

Here's their consensus on 10 of the most lethal missteps.

  1. Planning as you go.
  2. Thinking you'll "get rich quick."
  3. Playing Lone Ranger.
  4. Paying too much.
  5. Skipping homework.
  6. Ducking due diligence.
  7. Misjudging cash flow.
  8. Lowering the volume.
  9. Painting yourself into a corner.
  10. Miscalculating estimates.

 

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“Patience is not passive; on the contrary, it is active; it is concentrated strength.” ~Edward G. Bulwer-Lytton Remember the fabled story about the tortoise and the hare? It is tortoise that wins the race, because he is sure-footed and always moving forward. We choose to work with investors that understand the value of patience. If you want us to find a great investment property for you with a one week deadline we are not the agents for you. To get a great value you need to sift through A LOT of bad deals. Patience is hard and it takes practice. Patience is really about having the inner strength to stick to your guns, don’t sacrifice margins or your business plan. Patience = Profits. If you lose your patience the profits will follow the same fate.

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SELECTING AN AGENT TO BE PART OF YOUR INVESTMENT TEAM

The underlying components when selecting an Agent to seek and consult on investment property is are different from the criteria for owner occupied properties. Both the agent and investor need to find the arrangement mutually beneficial. Agents on The Yeatman Team do not work with investors that have business relationships with other Realtors. Why? That's the first key component:

TRUST  

Both sides of this partnership need to know that the other is 100% forthcoming with goals and information.  Without that the relationship fails. 

KNOWLEDGE  

An agent without  the ability to analyze financial data, historical trends, and recognize potential will fail miserably when working with investors. There is no emotional component to investing. It's all about the bottom line.

CONFIDENTIALITY  

The Agent that is able to maintain client confidentiality is paramount. Why? You need to know the clients objectives but sharing that information could have negative financial reprecussions. Cross that line and the relationship is over.

PASSION  

You have to love the "art of the deal" and be able to HATE TO LOSE. Only with the combination of the two will the profits be there.

Agents