If you want to learn how to get into Real Estate Investing then you have come to the right place. Real Estate investing is a complex yet rewarding way to earn money. However, since it involves large sums of money to be put in as capital it scares many newcomers. We are here to tell you that the real estate investment model is straightforward and easy to get a hold of if you are willing to educate yourself and take responsible risks.
So, here is the breakdown of how to create wealth when investing in real estate:
1. Educate Yourself
Before starting off, always learn in depth about the subject first. What is real estate investing? How to start investing in real estate? Where should I invest? These are all questions you should be asking yourself.
You can educate yourself by reading blogs, books, articles, and even textbooks. Some books that have been helpful to multiple investors over the years include:
The Millionaire Real Estate Investor By: Gary Keller, Dave Jenks, and Jay Papasan
The Ten-Day MBA By: Steven Silbiger
What Every Real Estate Investor Needs to Know About Cash Flow By: Frank Gallineli
Raising Private Capital By: Matt Faircloth
Rich Dad Poor Dad By: Robert Kiyosaki and Sharom Lechter
There are plenty of academic works written on investing that can get any beginner equipped with the right amount of knowledge needed to start. Because at the end of the day, after reading and researching, experience is the best way to learn.
2. Save, Calculate, and Save Some More
Undoubtedly the most important and the hardest part about being an investor is accruing capital. And to do the same you need to start saving aggressively and setting aside money to invest. While it may seem hard at first, it is a simple strategy that just needs to be followed diligently.
Let’s take for example you want to invest in a property that is worth 75 Lacs. Now, a typical down payment is 20% so for this property it will be 15 Lacs. Now, these 15 Lacs you can partially borrow and partially save over the course of 2-3 years.
If this is a stretch for you then maybe you can even settle for a property worth 50 Lacs for which the down payment will be close to 10 Lacs. Will that be a better financial fit for you when looking at savings over the course of a year or 2 years?
It is all about foresight and calculation. This planning will save you anxiety about how much and when you will be able to save.
3. Choose Your Style and Sector of Investing
Now that you have educated yourself on the basics and figured out a savings strategy, it is time to pick a specific sector that your real estate expertise will develop in. There are various kinds of real estate investing and proprietorship you can hold. Some of them include:
You own the home alone also known as sole proprietorship.
You own the home with others in a partnership arrangement.
You become a part of a syndication where your money goes into a pool with other investors to purchase a building/property through an aggregator. In this situation you are likely to be a passive investor, i.e. you are not making decisions.
You become a part of a crowdfunding company where you invest in an online platform which is like a syndication.
Depending on your finances and savings you can choose the one that is best suited for you. As years go by you can also switch within these types of ownership depending on what suits you best.
Apart from ownership methods that are also various types of properties such as commercial, residential, retail, office etc. If you want to pick one single sector as your niche then you should definitely go for it.
A big part of real estate investing is building a network. Get in touch with other investors, brokers, landlords, and try to learn as well as get insights about the market from them. This will help you make more informed decisions about where to invest since these professionals know everything about the real estate investment business model.
Apart from insights a good network will also help you crack good deals, get new properties at lower prices, and grow your business economically. Once you enter the market you’ll come across people from all walks of life who are involved in real estate and it is in your interest to keep in touch with them.
5. Make Your Offer
When investing in real estate, you won’t succeed if you won’t try. And the best way to try is to make an offer and it costs you nothing to just pitch your amount. When telling a builder or developer be firm and quote the price you are willing to pay for the property. At best they will accept it and at worst they will either reject or renegotiate it.
But the best way for you to claim your property is to get them on the negotiation table, willing to lower their prices. Quoting and getting rejected or renegotiated is a big part of learning within real estate investment. It refines your skills in networking and negotiation and finally puts you out into the real market. It is the space where you get to practice the knowledge you have been learning this whole time.
And that is it!
This is the essential starter pack for any novice who is trying to get into real estate investing. It may be a daunting industry, but once you secure your footing it is an incredibly lucrative and rewarding space to be in.
Just remember to stick it out and persevere, as the initial struggle is for everyone but it is a big part of learning and becoming successful.