Ninja Real Estate Investing Tips

Posted on 04. Jan, 2011 by in News

So this is it! This is the year when you are finally going to take the leap and move from arm chair to actual investor.   You’ve read all there is to read about how great real estate investing is and how it is one of the most used methods for achieving passive income, wealth and ultimately financial freedom.  Great ! Now where to start?

There’s a lot of work to be done even before you find that great piece of property -identifying the right kind of property you are interested in, securing funding, checking out location and economic fundamentals, zoning and putting together your winning team (lawyers, accountants, real estate agents, inspectors, property managers etc etc). This is just the start – maybe you have a spouse or significant other, is he or she supportive of your commitment to real estate?  It’s a time consuming task and often takes real perseverence to balance work and family life.

 Have you taken the time to identify what areas of real estate investing you need to develop further – now is the time to take stock of what you don’t yet know and learn it!  Buying investment real estate is a huge commitment and one that should not be taken lightly. It’s a continuous learning curve filled with many ups and downs.  It is no easy ride and there are no short cuts.

If you haven’t been put off, there are a few basic tips that can help make your first real estate investment property purchase easier.  Firstly, identify the kind of property investing you are interested in, is it buy and hold, rent to own, commercial real estate, condos, single family, multi family homes – duplex, triplex, apartment buildings, – or maybe it’s fix and flip or even raw land on which to develop.  There are many, many ways to invest in real estate.  You have to find out what ‘floats your boat’, what interests you and what you are able to afford at this stage of the game. You should have a very clear plan of what you want to accomplish from your real estate purchases, is it positive cash flow (passive income) from investment property/properties? or maybe you like the idea of fixing up and flipping properties.  Learn all you can in your area of interest - become a master of this ‘type’ of investing.  Believe you me, it is much easier to specialise in one or two areas than try to become a master in each one – you will get swamped!

You will need to identify how much risk you can handle, because of course like every other investment, there is an element of risk involved – but as long as your research is thorough, that risk is a controlled one. Determining  your level of risk will identify how much money you are prepared to invest in the real estate deal.   

Now that you have identified how much money you can afford to spend, it’s time to secure funding.  Don’t under estimate this step of the game, you should go out of your way to ‘blow your bank manager away’ with the amount of research you have undertaken, crunching your numbers down to the last cent. Of course, funding doesn’t necessarily have to come from a bank, there are private investor options too.  Whatever way you choose to obtain funding, be sure to have all your numbers readily available for analysis.  This is one of the most important elements of your due diligence.

Finally, a good way to drive your planning process is to work out how much additional passive income you would like to make each month from each of your properties.  Keep this number firmly in your mind as it will help you with your financial analysis when you find the profitable property that fits your criteria.

Commit to your plan and modify it when required. You wouldn’t set off on a journey to a new destination before planning the route would you?  Well the same advice applies to real estate investing.  Planning your route is an important step and the more research you do beforehand to build your foundation of knowledge, the more success you will attain.  Work hard to achieve your goals, stay focused, keep learning, take risks and most importantly – take action today to secure you a wealthier tomorrow!

To your investing success!

Richard

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