Education and news for smart DIY landlords!
Real estate investing isn’t as simple as you think. It’s not just about buying property and reselling it for profit. That’s the first and most common mistake beginners make. Above everything else, you need to have this thing we call a real estate portfolio.
What’s a real estate portfolio, you ask? It works like a resumé. But, instead of applying for a job, banks need to look at yours before they can trust you with leverages especially if you can’t afford to buy a property immediately.
For homebuyers, they need to look at your portfolio to make sure if the property you’re selling is safe and legitimate. A real estate portfolio is also essential to attract more clients in expanding your property venture. You can build one from absolutely zero by thoroughly following these tips.
Your real estate portfolio doesn’t build upon the trial-and-error model. You’ll lose a lot of money that way. What’s worse, banks will not trust you for leverage due to your inexperience.
It’s imperative to learn about real estate through online courses, broker schools, or thoroughly reading books and articles first. Another effective way is to join a team of real estate professionals/investors and learn from them.
When you’ve learned the necessary knowledge of real estate investing, ask for a recommendation, license, and certificate. Then, add those to your portfolio.
How much financing do you have and can provide? You can assess your life savings or consult with your bank. What type of investment management do you want? Pick on being an active or passive investor.
Which neighborhood are you targeting? Search for residential or commercial properties. Who are you marketing to? They can be homebuyers with families, students looking to rent, or businesses seeking commercial spaces.
These are important questions that you should answer because it will help you decide what investment plan to use.
Once you’ve answered the questions above, it’s time to pick what investment to use which is doable based on the answers. You can choose whether to buy-and-flip, house hack, or BRRRR. There are also more investment strategies you can choose from this list.
So you’re done choosing an investment method. The next step is to find a property and survey the area for potential sales or tenants. For example, if the investment method you’ve chosen is to house hack, see if there are tenants looking to rent a room of your property and know how much is the rent in the area.
When the market seems promising according to your calculations, contact your bank, and seal the deal with the home seller.
Go back to #3 and remember the plan you made for your investment model. Look at the property and think about what you can do with it. When you’re done, calculate the costs needed to realize your vision of the property such as renovations, repainting, or repairs.
When the total costs are calculated, put your plan to action. Set your price for rent or sale. Find buyers or tenants. Do your best to secure a sale and reap the profits.
Now that you have your first real estate success, add that experience to your portfolio. Ask for a review from your clients or tenants. Add their testimonies to your portfolio as well. Look at your profits and decide what to do with it.
Are you going to use the same real estate investment strategy or are a new one? Whichever your answer will be, go back on #2 and follow the tips all the way to #6. Keep on repeating the process while moving up the ladder.
Don’t forget to document every successful investment. Don’t forget to ask for reviews and testimonials. And the most important thing of them all - don’t forget to add these documentations, testimonials, and reviews to your portfolio.
Building a real estate portfolio is not easy and there are no shortcuts. The journey will take time, a lot of brainpower, money, and effort. But, if you know how to research the market well and play your cards right, nothing can go wrong!
Looking to learn more real estate investment tips? Read these!