How do I invest real estate? Experienced about this, they will give me some tips, please.
What training have you invested in already, so we’re not starting from scratch…
You’ve got more than oodles of training available in the column to the left. Start there.
Otherwise, the first thing you learn to do is find deals. Everything falls from that.
More specifically, it doesn’t start with websites, LLC’s, and all sorts of busy work.
Of course, the very first question to answer is “Why are you investing in real estate?”
Some people don’t have a good ‘why,’ and anything distracts them from accomplishing much, if anything, because they don’t have a clear purpose, or goals. Never mind not having a clear time-frame to work from.
For example, are you investing for immediate cash-flow? Retirement income? Income tax evasion? (just kidding) Wanting to create a job for yourself? Or you just want to call something ‘yours?’
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One thing you can do is make family member or friend as a money partner. You put in sweat equity as your contribution to the partnership being a managing partner, and they will make contribution with down-payment, then split any profits accordingly creating a win-win for both parties.
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[b]That is a great way to start. The issue is actually reducing all the expectations and conditions to writing. It’s a partnership, and despite being between family members, it’s actually a ‘business-oriented’ marriage of sorts.
Marriages are difficult, and so can be partnerships… [/b]
If you’re interested in building wealth, you’ve probably wondered about real estate investing. On the one hand, it seems like a great idea, especially if you live in an area with a booming real estate market. But on the other hand, you may not be ready for the commitment.
Whether or not real estate investing is a smart idea totally depends on you, your financial situation, and your goals for the future. It’s not for everyone, but it can be a great wealth-building tool when it’s done the right way!
If you’re new to real estate and would like to add property to your portfolio, it is always good to start with a real estate investment trust (REIT) or a crowdfunding site. I do not know how much capital you’re starting off with, but those two options require significantly less money than other investment methods. REITs and crowdfunding are a great transition into the world of real estate because while you will have a company trust or LLC managing your asset, you will still get the chance to learn a lot about how property deals are made and what to look for. Once you start to generate more capital and gain more extensive knowledge of real estate, you should decide what type of property suites your interests/financials and go from there. Best of luck!
No. This approach is for retirees with no appetite, experience or willingness to learn how to invest in real estate, and that want a better return than a savings account offers.
Otherwise, you find a bargain on a beater and either fix it and flip it, or just flip it for a finder’s fee, and keep doing ‘that’ until you can buy and hold a passively-producing income property. The you rinse and repeat, until you can start investing in apartments. Or you can just start with apartments. I briefly bought fixers and rented them, and then jumped into apartment investing, and then started flipping the financing on houses.
Fixing and flipping is pretty advanced for someone just starting out in real estate investing. I don’t know what he wants out of real estate investing, but there are various ways to get you to your goal. I agree that REIT and crowdfunding sites are definitely a less aggressive approach, but they still give people a basic foundation of real estate. I wouldn’t want a fresh investor to jump into a fix-and-flip deal without fulling understanding the risks and then losing all their money after realizing they are way over their heads. People who don’t have much training on fix-and-flips won’t truly understand the range of costs/repairs, manual labor, time, and partnerships required for a deal be successful. It would be unwise to push someone into such an advanced topic without first knowing what to look for in real estate property.
This is all an abstraction, since we’re talking abstractly what a person can do to get started.
People don’t do what they think they can’t do. On the other hand, there’s no shortage of enthusiasm amongst the newbies I’ve ever encountered over what they ‘think’ they can do, while having zero experience.
I’m not seeing how investing in a REIT, or crowdfunding, is at all a way ‘get training’ in real estate. It’s probably a way to get familiar with reading a prospectus …but that’s the extent of it. Never mind the lying and over-promising in either of these.
The fact is, there’s relatively inexpensive training (ie: on the left side of this forum) that anyone can purchase that will provide the fundamentals necessary to get started in this business.
Otherwise, the actual key to getting started is ‘finding a deal’ by first becoming familiar with market values.
I mean how sophisticated do you first have to be to find the fugliest house in the neighborhood, owned by an otherwise motivated seller, and then make an insulting 50% offer, and keep doing it, until someone says, “Yes?” Sure, that’s clunky, but even the worst dumb butt can be successful, eventually, moving forward with this kind of blunt force.
The issue revolves around the level of commitment and time one can spend chasing deals this way (or at all), and how long it takes to learn how to negotiate an offer.
Again, there is inexpensive training on how to find, negotiate and close on deals, whether it involves wholesaling, buying-and-holding, or even merchandising real estate.
But plowing money into some REIT, or hoping not to lose on a crowdfunding offer, is much more of a gamble than personally diving into a market and uncovering your own piece of the pie.
Never mind that if the newbie is getting financing, the lender serves a backstop (or interference) against making stupid decisions. Otherwise, crowdfunding and REIT’s will take your money, no matter how ignorant (stupid) you happen to be.
As an aside, any investment involves risk of loss, but not knowing ‘why’ one is investing represents the biggest risk.
Simply reading a few forums isn’t going to prepare you for the complicated work of fix-and-flip deals. It takes a lot of practice and extensive research to be truly prepared for complicated deals. I would also suggest finding a mentor to teach you the ways and attending local real estate seminars for information and networking. For a fix-and-flip, buying a house isn’t the hard part. The hard part is having the knowledge and due diligence to go through tons of potential properties to determine the few available listings that truly fit with the fix-and-flip model. Newer investors will have a hard time estimating all the costs required to add value to the house and make it appealing to buyers. I’ve seen new investors ambitiously attempt to do a fix-and-flip deal, only to be drowned by the flood of costs and expenses. These investors are lucky if they make a profit, I know of some who lose money in the deal and feel discouraged and nervous about trying their hand again. It makes no sense to suggest this is a simple method that only requires reading a couple of REI Club threads to proceed with a deal.
If you want a more hands-on investing experience, then turn-key is another method that gives you a solid start and is easier to create positive cash flow. Turnkey properties are unique in the sense that they’re already rehabbed. For a prospective investor, this means there will be little to no additional work in terms of repairs and renovations, and the property can be immediately rented out if there is no tenant occupying the property already. While there are downsides such as fees taken by turnkey operators, it is still a good investment method to give you experience and a steady cash flow over a longer period of time. You could have a manager that does most of the work but still keeps you in the loop so you can learn the REI process and know how to proceed with your next investment. While turnkey houses generally require less time than other types of real estate, you still shouldn’t underestimate how much work is required to do it successfully.
The most important thing in my opinion is pay attention to the area where the property is located.
Easiest way to make money investing in real estate is by rentals. Rentals is a great way to make additional income with a minimal amount of effort.
Rental properties are a solid way to invest and is a good long term strategy. In today’s market though, you have to be careful and make sure the numbers truly work. Lots of multi-families are quite pricy in many parts of the USA, so it’s a matter of consistent research, watching market trends, and running numbers over and over until eventually you find a deal that makes sense to you.
Pavel, Real Estate Investor & Marketing Consultant
Yes rentals are good if you can get a loan. Start flipping contracts and learn while you earn. Fix and flips are good but also alot of stress. You may have a great payday but at what cost $$$ :bs
For beginners: do you know what your buyers want and what is a great wholesale deal?
At first, need a lot of money, if you have it, find the best partner or some experience people and had knowledge about real estate business and enjoy your investing.
Figure out what area of Real Estate you want to be in then go to the next step. Sometimes this is the toughest step of all. Real Estate is a very broad industry.
There are many ways to invest in real estate, like you can purchase residential or commercial property in prime location. But before buying a property must confirm the future of property in upcoming days because it is very must when you want sell them that is sale on good price and instant.
Modified due to rules violation
Actually, there are different ways to invest in real estate, but for me the most appropriate way is crowdfunding, so I can tell about it. In short, crowdfunding is a way of investing in projects by raising small amounts of money from a large number of people, typically via the Internet. With crowdfunding, you just need to find a platform, choose property to invest (or some of them if you use diversification) and… invest! It’s quite a simplified scheme of how it works, but in reality, it is not complicated too.
Most of the answers you look for can be found on youtube. I would say though don’t try to follow everyone’s advice. Find one successful person and get going to avoid analysis paralysis. Good Luck!
Good Neighbor Home Buyers
While I’m in the process of learning the ins and outs of investing in properties myself, I’m also doing real estate crowdfunding. Basically, I like this method as it is actually often possible to read a bit about the investment thesis on such platforms and that it is possible to be somewhat involved with real estate. However, when I get more funds and knowledge, I will definitely try and invest directly in properties.