Investing in real estate can be complicated financial investment.
Many people think of stock investment, or some other securities investment as complex and analysis driven.
Purchasing and selling real estate can be just as difficult and involved.
There are several important questions that any potential investor must ask themselves before jumping into investing for profit.
The first question that you must ask yourself is, how much money can you invest? Purchasing properties at foreclosure sales frequently takes a high amount, as in 100% of the sales price, liquidity.
Do you have that in a retirement account, self directed IRA or some other form of accessible money? If so, you cross the first hurdle.
Many people use a home equity line of credit to invest in property and that is a great source of liquidity too, but keep in mind as you search for and acquire source of funding, interest demanding sources of funding eat into your bottom line so use them sparingly if possible.
Another great rule of thumb in investing in real estate is to use the banks money, or another financial backers money as much as possible.
It allows you the freedom to use your cash as an emergency back up source of funds, and trust me, you will need a backup on occasions.
Another vital question before you start investing in real estate is, can you tolerate a high level of risk? If you are a real estate developer or just a fix and flipper, there is a high degree of risk in investing in real estate.
The upside is that if things go bad, your investment is always backed by builder, lot or some other form of tangible asset.
This is why I think investing in real estate is a better investment than the stock market.
Real estate investing still has a high degree of risk or it wouldn't be profitable and everyone would be doing it.
You really need to consider the possible stress you will be facing if things start to go "worst case scenario" on your investment, and the impact that may have on you emotionally, financially and personally.
After weighing the possibility of failure against the rewards of possible success, I think you will come to the same conclusion that I have, and that is educating yourself will help you manage risk and stress.
Your long term future plans are also very important to consider in your real estate investment practices.
If you are planning to retire within 5 years from the millions of dollars you are going to make while flipping manufactured homes in Kansas, then I advise you to reconsider.
Given that appreciation rates are typically conservative in Kansas, and even more so on manufactured homes you really must plan your retirement goals around that.
If you are planning on the most conservative amount of business success and profit then I think you will be pleasantly surprised with your level of success.
Aim too high and you may be setting yourself up for disappointment, or even failure.
Investing in real estate takes a lot of moxie and some good ole hard work.
If you have the willingness to go drive nails on job sites when contractors walk off after a disagreement with each other, or you, then you will be fine.
That will be necessary at times.
Negotiation skills are another requisite for real estate investors.
You will negotiating with real estate brokers to sell your property, with buyers to get your homes sold and with contractors to fix your properties up, so get used to the idea of being flexible and "big picture" oriented.
In other words, real estate investing cannot be about you getting everything you want and the other people involved pounding sand.
If you keep in mind that people all expect to get paid for their time and efforts, then you will do fine when dealing with them.
Time considerations are also something incredibly important to your business as a investor.
Keep in mind that many of your prospective buyers will be wanting to look at homes after they get off work, with is typically after 5 pm.
Many days will be 1 hour days and you may have to forfeit or cut short birthday parties, anniversaries or other important events to close deal.
There are many investors who do a great job and make a lot of money running their businesses part time or as a second job.
If this fits into your paradigm it may benefit you to
Many people think of stock investment, or some other securities investment as complex and analysis driven.
Purchasing and selling real estate can be just as difficult and involved.
There are several important questions that any potential investor must ask themselves before jumping into investing for profit.
The first question that you must ask yourself is, how much money can you invest? Purchasing properties at foreclosure sales frequently takes a high amount, as in 100% of the sales price, liquidity.
Do you have that in a retirement account, self directed IRA or some other form of accessible money? If so, you cross the first hurdle.
Many people use a home equity line of credit to invest in property and that is a great source of liquidity too, but keep in mind as you search for and acquire source of funding, interest demanding sources of funding eat into your bottom line so use them sparingly if possible.
Another great rule of thumb in investing in real estate is to use the banks money, or another financial backers money as much as possible.
It allows you the freedom to use your cash as an emergency back up source of funds, and trust me, you will need a backup on occasions.
Another vital question before you start investing in real estate is, can you tolerate a high level of risk? If you are a real estate developer or just a fix and flipper, there is a high degree of risk in investing in real estate.
The upside is that if things go bad, your investment is always backed by builder, lot or some other form of tangible asset.
This is why I think investing in real estate is a better investment than the stock market.
Real estate investing still has a high degree of risk or it wouldn't be profitable and everyone would be doing it.
You really need to consider the possible stress you will be facing if things start to go "worst case scenario" on your investment, and the impact that may have on you emotionally, financially and personally.
After weighing the possibility of failure against the rewards of possible success, I think you will come to the same conclusion that I have, and that is educating yourself will help you manage risk and stress.
Your long term future plans are also very important to consider in your real estate investment practices.
If you are planning to retire within 5 years from the millions of dollars you are going to make while flipping manufactured homes in Kansas, then I advise you to reconsider.
Given that appreciation rates are typically conservative in Kansas, and even more so on manufactured homes you really must plan your retirement goals around that.
If you are planning on the most conservative amount of business success and profit then I think you will be pleasantly surprised with your level of success.
Aim too high and you may be setting yourself up for disappointment, or even failure.
Investing in real estate takes a lot of moxie and some good ole hard work.
If you have the willingness to go drive nails on job sites when contractors walk off after a disagreement with each other, or you, then you will be fine.
That will be necessary at times.
Negotiation skills are another requisite for real estate investors.
You will negotiating with real estate brokers to sell your property, with buyers to get your homes sold and with contractors to fix your properties up, so get used to the idea of being flexible and "big picture" oriented.
In other words, real estate investing cannot be about you getting everything you want and the other people involved pounding sand.
If you keep in mind that people all expect to get paid for their time and efforts, then you will do fine when dealing with them.
Time considerations are also something incredibly important to your business as a investor.
Keep in mind that many of your prospective buyers will be wanting to look at homes after they get off work, with is typically after 5 pm.
Many days will be 1 hour days and you may have to forfeit or cut short birthday parties, anniversaries or other important events to close deal.
There are many investors who do a great job and make a lot of money running their businesses part time or as a second job.
If this fits into your paradigm it may benefit you to