Like starting any venture, first, you have to imagine what it would be like to cross the finish line or else, you would not take on the burden. There are many benefits to owning a lot of real estate. You can create massive passive income. You can quit your job and spend your time doing things that make you happy. You can retire early. Whatever your reasons are, write them down.
Next, create a specific goal, something more than “I want to make a lot of money.” Be specific.
CREATE A SPECIFIC GOAL
Here is an example:
Goal 1: Make $500/mo per month in cashflow per house
Goal 2: Buy at least 4 properties per year
In this scenario, if you wanted to retire at $10,000 a month in passive income, it will take you roughly twenty years. You might get there sooner, but at least now you have a real measurable goal to attain.
Here is another example:
Goal 3: Make $1 Million in 10 years buy fixing and flipping 10 homes at 100k Net profit per.
PICK THE RIGHT PROPERTY
There are 3 types of properties to own as an investor: residential, single-family, and multi-family. If you are trying to decide which investment is for you, it really depends on what your risk level is and what your cash-flow needs are. For example, you can collect more rental revenue in a multi-level home, while you will experience more tenant turnover and maintenance costs than a single family unit.
Research and talk to potential lenders, and make sure you have the finances ready to obtain funding. There is a good chance you may not be able to get funding from a traditional lender. Your best bet may to be find a private, hard money lender. A hard money lender will want a relatively fast payback time, in which case, it is more ideal for fixing a property and selling it within a timeframe you and your private lender agree on.
LOCATION, LOCATION, LOCATION
There are multiple factors to consider when picking a real estate location. Make sure the demographic is one with a growing population versus an area that is on the decline. Ideally, you want a home to be within a good school district so parents with children want to live there. Rental rates and property taxes are additional factors to consider.
MAKE AN OFFER
The length of time a listing has been in the market, directly correlates with an increased leverage you may have over the buyer. If other potential are also involved and making offers, your ability to negotiate might be affected by events out of your control. Regardless, make sure the offer is contingent upon a full inspection so you can back out if there were any issues discovered.
This is the step that requires action and good negotiation skills. Don’t be afraid to make a low offer. The worst that can happen, is that a seller can turn down the offer, in which case you can make a new offer. In most cases though, you will get a counter offer, which will get you one step closer to purchasing at a better price.
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