When you want to invest in real estate, it may be hard to take the plunge and invest in your first property. Sometimes people feel overwhelmed or unsure; other times, they just aren’t sure how to go about getting started. A real estate investing road map can simplify the process so that it is less intimidating and more definable.
Why Do You Want to Invest?
First, you need to answer this question. What do you want to accomplish? Are you trying to make extra money, or are you looking to make a long-term investment?
How Much Cash Do You Have?
Next, you need to figure out exactly how much cash you have for your investment. It is important to have this information before you go any further.
Look at Available Financing
There are many different ways of borrowing money to invest in real estate. You need to familiarize yourself with all of them so that you can determine which will be best for you and your particular investment. Look at the following:
- Bank mortgages
- Mortgage brokers
- Hard money loans
- Credit cards
- Private loans (family or friends)
Research the Market
This is one of the most challenging steps in the real estate investing road map. When you are getting started, you may not know what the market holds. You need to research to learn which locations have the potential to do well. Where do people want to live? Look to see if there are any plans for development going on.
Have Backup Exit Plans
You have already determined your goals in investing in real estate, but you must also make a plan to exit. What if your plan doesn’t work out? What if you can’t sell it in the manner that you expected? Investors and lenders will want to know what your exit plans are, and you should plan them ahead of time.
You will need to work with local banks, realtors, property managers, contractors, and insurance agents. Make a list and find the team that will be best for you.