Best Tips For Entrepreneurs Looking To Invest In Real Estate

“If you’re so smart, how come you’re not rich yet?” It’s a common adage that many budding entrepreneurs hear during the course of their everyday conversation. The usual retort, of course, is “ I’m getting there!” And hopefully? You are. But if you’re a real estate investor, all you really have to do is show doubters your property portfolio. Typically, that puts such cynicism to rest. And with good reason. After all, shelter is of the great vital necessities in life—even in commercial real estate. And opportunities are in plentiful demand. But it’s a high risk gamble. It’s been estimated that 28.1 million Americans consider themselves real estate investors. And with that number, the obstacles facing entrepreneurs can be relatively high. It’s no longer enough to seize what looks like a great opportunity when 2018 reported a decrease of approximately 7.7 percent in sales of new single-family homes and 10.3 percent in existing homes. That’s the bad news. The good news? With a strategy emphasizing foresight and care, you can eliminate the chance of loss and increase the chance of return. Here’s some of the best tips for entrepreneurs looking to invest in real estate.

Know Your Target Market

It’s one thing to have a general understanding of how real estate markets operate. But it’s another thing to have an understanding of market performance in specific metropolitan cities. And market performance can be predicated on several factors, in addition to historical sales:

  • Socioeconomic growth or decrease
  • Development and urban planning
  • Proximity to major schools, highways and businesses
  • Changing demographics
  • Crime risk
  • Employment rates

If you’re just beginning to look at real estate investment, it’s important to remember that historical sales are never constant. They don’t just change annually, but month to month. What might seem like an ideal opportunity in a buyer’s market could turn out to be the result of high risk potential in any of the preceding factors. Review your targeted neighborhood carefully. Sometimes even high opportunity zones can yield negative returns if businesses choose to invest elsewhere.

Know Your Metrics

In particular, both vacancy rates and construction rates. A general rule to keep in mind is the higher the construction rate, the higher the price range. Frequently, this is a result of a higher demand in up and coming neighborhoods. But the opposite holds true for vacancy rates. Generally speaking, more vacancies in a neighborhood means lower rates. More often than not, this can be due to a large amount of foreclosures—as witnessed in the 2008 housing crisis. And while it might be tempting to take advantage of low priced properties in distressed neighborhoods, keep in mind the sustainability of your investment. Higher vacancy rates exist for a reason, and you won’t necessarily find many interested buyers regardless of the refurbishment you may have conducted.

Do You Always Get What You Pay For?

One area that many beginners in real estate investment frequently overlook is the cost of auxiliary materials. That can include marketing, construction, attorneys, inspection services and title insurance. All of which can wind up costing you more than the bargain you initially anticipated if you’re not careful.

“Early on, I made the mistake of hiring a home inspector who later turned out to be less than reputable,” explains Alex Forrest, an investor from Salt Lake City. “And unfortunately, he recommended some area contractors who ultimately billed me for renovations and repairs which turned out to be entirely unnecessary. Not only unnecessary, but entirely too lengthy. By the time they were finished, I was out $30,000—in addition to legal fees. All on top of a home I thought I was only paying $175,000 for!”

Work With A Team You Can Trust

While disreputable contractors are unfortunately not an anomaly, that doesn’t mean you won’t find ones who are not only trustworthy but consistently deliver craftsmanship. You’ll want to review their portfolio. You’ll want to see examples of their work. And you’re definitely going to want to ensure they’re registered with the Better Business Bureau and have necessary certification for residential property renovation.

More importantly, you should look for a mentor who can guide you through the process of investing—particularly if you’re just beginning a career as a real estate investor. Not only can they provide invaluable advice on what to prepare for, they can act as a referral service for brokers, realtors and attorneys who are both reputable and can find you ideal properties at an ideal price.

 

As we said, shelter is a vital necessity and ideal investing opportunities are in high demand as a result. So are risks. But with some forethought, you can minimize the pitfalls and wind up not only on top but on your way to being a successful real estate entrepreneur. Here’s hoping you simply don’t stumble more than you have to.

 

Are you serious about a future in real estate investing? The Colorado REIA is the state’s premier investment association, providing coaching, guidance, workshops, networking opportunities and a host of other exclusive member benefits. To find out more, visit us at https://coloradoreia.com/ or call (303) 816-3653

 

Best Real Estate Investing Strategy to Build Real Wealth

Real estate has been making news for the last few years – good and bad. Many have considered investing in real estate an ideal long-term investment. Property values increase over time and generate passive income along the way. With the right kind of wealth building  and investment strategies, it is possible to profit and build real wealth through property investments.

It may not be a simple process, as building real wealth takes many cycles. You cannot simply sit and relax and watch the money roll in. Good investment strategies involve having a set of sensible approaches, from identifying your needs and developing a program that works with your plans.

Here are a few wealth-building strategies that will help investors – new and experienced – achieve their end-goal

Own a home first

As one of the most common approaches being practiced today, home ownership has become a motivating factor for many. It serves as a base while you continue to live your lives. Owning a home, when held and sold, serves as capital-gains tax-free profit. Properties appreciate over time, so when the time comes that your children move out, you can sell the bigger home and settle in a smaller one. That leaves you with a bigger return on investment, and you can use the equity from the sale to start on other investments and earn income.

Buy properties from up-and-coming neighborhoods

Invest in a budding real estate market. Research where most young people move to nowadays. These are the markets where the value in that area will increase as its residents’ earning powers increase. If you realize that rents go up drastically, do not sell your property. Instead, rent it out and use your property as an income-generating property. The money will continue to roll in and you can use the profits for more investments.

Learn to know the “whys” when investing

The essence of true wealth is not just about building stock portfolios or money. In achieving lifelong wealth, one needs to understand and discover their “whys” and use it to help others. It should be your passionate motivation and life’s purpose. Planning is key, especially if your “why” leads you to launch or invest in a business. Look at all the resources available to you and have a clear idea of your goals, as well as an exit strategy.

Most successful entrepreneurs build and shape the purpose of their business by fully understanding their journey, from start to finish. Success metrics are something that can be measured; otherwise, it will be difficult to manage your investments. Once you have a clear understanding of your “why” and learn to empower people along the way, real wealth will soon follow.

Rent out residential properties

The real estate market may not be as booming as it was before. However, one of the best investment strategies to build real wealth is by investing in properties you can actually rent out. In reality, no matter how good or bad the economy is, people need a place to live in. Apartments, condos, duplexes, single-family homes, and townhouses are easy to finance, sell or rent. In the event of a downturn, these properties still maintain their value.

Another reason why this is a good strategy is that residential properties offer more flexibility than any other kind of real estate. For example, if you lose a tenant in a commercial real estate, the value of your property goes down. A residential property, on the other hand, holds and even increases its value, rented or not.

Invest in Dual Occupancy

This strategy is almost the same as property development, where you buy a building and build two or three dwellings to sell, finance, or rent out. In this case, you need to build a second dwelling or a granny flat on a property. You can partition an existing residential unit and create two dwellings. This gives you two rental incomes from one property. This is one of the wealth-building strategies that is considered a high-yield method because it has an opportunity for strong capital growth once sold.

Investing in high scale markets like real estate always involves risks and has a potential for financial losses. Before making such a huge decision, always seek professional advice and guidance from a licensed and accredited financial advisor.

Contact us at Colorado REIA for more information how to build your wealth and live a happy and financially stable life.

 

Five Different Ways To Invest In Real Estate

If you’re looking to invest your money and diversify your portfolio in new ways, real estate can offer you several avenues for doing so. Real estate can help you increase your assets and provide additional income streams. The choice to invest in the field of real estate can be rather lucrative if done right.

How to invest in real estate?

One of the hardest parts of breaking into real estate investment can be figuring out the best place to begin. With a defined strategy and clear vision you can embark on your own path to success. Below are five key ways to invest in real estate and diversify your portfolio.

Rent Rooms

A great starting point to becoming a successful real estate investor is by taking advantage of the space you already have. Whether you’re subdividing your home or renting out a spare bedroom, there are several paths to bring in steady income. There’s also the prospect of renting out your living space using app-based services such as AirBnB.

This avenue gives the investor an opportunity to try out being a landlord without a huge upfront monetary commitment. Renting out rooms through a third party booking service such as AirBnB offers the protection of a basic level of screening through their registration and ratings. It also offers a host guarantee that helps cover any basic damage that may occur.

Rent Properties

One of the more tried-and-true forms of real estate investment is becoming a landlord. Buying and renting out properties or space to tenants is a practice as old as time. Whether you’re buying out commercial space and signing long-term leases to corporate tenants or renting out apartments to families, being a landlord can be quite a lucrative investment opportunity.

Of course this method has drawbacks of its own. This form of investment requires significant cash upfront to purchase or mortgage the property. There are also costs associated with rehabilitating and maintaining it. There are also risks associated with dealing with tenants and their potential impact on the property. Until you have the revenue to develop or hire a property management company to deal with some of these headaches, it’s important to remain mindful of the risks.

Flip Houses

Another well-tested method for growing your wealth is fixing up and reselling homes. Popularized in reality television shows over the last couple of decades, the idea of purchasing an undervalued home and renovating it as economically as you can isn’t always as glamorous as those shows make it out to be.

It’s important to have a solid understanding of what it takes to successfully rehabilitate a home or to find a partner that does. You’re looking to invest in a property that is undervalued and in need of only minor cosmetic upgrades in order to raise the resale value to potentially earn a profit. Not paying attention to the market overall or knowing how to find potential structural issues can quickly take a property from a prospective goldmine to a complete bust.

Crowdfunding

The internet has served as a monumental platform that has shaped the core of our economies and society itself in remarkable ways. From automated banking to the rise of cryptocurrency, the internet has changed the core foundations of markets as we once knew them. With the advent of crowdfunding investment platforms, the ability to begin to invest in real estate has never been easier.

The SEC has traditionally regulated crowdsourced investment platforms similarly to syndication. This means that you had to be an accredited investor with a decent amount of capital to invest. Thanks to recent changes in regulation, non-accredited investors can begin investing with as little as $500 thanks to platforms such as Fundrise and RealtyMogul. These sites prescreen and only accept a minimal amount of projects proposed to help ensure the highest returns on your investment.

Real Estate Investment Trusts

Real Estate Investment Trusts, commonly known as REITs, give investors an opportunity to break into the market without needing to be as involved as other methods. REITs are public or private companies that own a portfolio of real estate holdings. They tend to pay out high dividends and make a great form of passive income.

REITs can come in a variety of forms depending on the company you’re investing in. Publicly traded REITs tend to trade on exchanges like stocks, while private non-traded REITs may be harder to sell. The type of REIT you choose to invest in can help determine your risk, so it’s important for you to carefully research where you choose to invest your money.

An evolving and growing market allows you to get into real estate investing easier than ever. From renting out the spare bedroom in your condo to investing in real estate investment trusts that have vast portfolios, there are more chances for you to grow your wealth now more than ever. Pay attention to new trends in the market and for any new opportunities that may arise.

 

Please feel free to visit Colorado REIA for more tips on real estate investment.

 

Five Traits of Successful Real Estate Investors

Key traits of successful real estate investors and tips for successful real estate investment

There are several key ways to build your wealth and diversify your portfolio through real estate investment. These include property management and wholesaling. Thanks to a multitude of methods for achieving success and prosperity, real estate investors have more opportunities than ever catering to a wide array of skill sets and experience.

What traits do real estate investors have?

Whether you’re new to real estate investment or a seasoned real estate Investor, there’s always opportunity in the market for those who are willing to find it. While there are colleges and technical schools that offer specialized programs for real estate, secondary education isn’t always needed for success in the field.

By developing and honing these key traits you can help solidify your path to becoming a successful investor.

Plan Properly

You don’t want to jump into real estate investment blindly. This is a field that requires a fundamental understanding of the market and the dynamics that lay at its foundation. While secondary education and experience aren’t always needed, they certainly wouldn’t hurt either. It’s important to constantly expand your knowledge and understanding of the market.

Having well-defined goals is critical for the apprentice investor. Working towards a goal prevents you from stretching yourself too thin and can help you maximize your profits. You need to treat real estate investment as you would a business, complete with clear short and long term milestones you’re looking to achieve.

Be Passionate

A key component of getting into any form of investment is to be passionate about what you’re investing in. Successful investors simply live for investment. They never stop learning, and they understand there is plenty they don’t know or fully comprehend which allows them growth and advancement.

Successful real estate investors are simply more committed than most. They’re devoted to maximizing their returns and scouting out new opportunities to expand their wealth. It’s important for you to constantly expand your understanding of the market and how you approach it as the market continues to expand and evolve.

Never Quit

Determination and perseverance are key traits accomplished investors have. It’s just as easy to lose faith when there are delays on a project as it is to feel elated after closing a big deal. You can’t quit when your prospects aren’t exactly looking the brightest.

Investment is a journey like any other in life. It’s important to bear in mind that the journey is a marathon rather than a sprint, and you may occasionally stumble along the way. There are plenty of situations in life where things beyond our control can happen. Therefore, it’s important for you to stay resolute in the face of any adversity that may come your way.

Think Logically

Real estate is a unique form of investment in that it can take a fair degree of intuition to help you be successful in the long-term. Unfortunately for some, this can lead to investing in the potential of a property rather than the property itself. It’s critical to pay attention to the changing conditions of the market so you can better forecast evolving market trends.

While it is important to think outside the box when it comes to investing in a property rather than solely playing it by the numbers, it’s just as important to not invest based on arbitrary ideas like your personal attachment to a property or neighborhood. Remain disciplined and focused as you choose where to invest your money.

Think Outside The Box

As stated before there is a fair degree of importance in applying some unconventional thinking to your approach. You need to be nimble and responsive to changes in the market and expanding your understanding of it. There will be times where you need to carefully weigh potential risks against the potential reward and opportunity afforded.

There may be instances such as when a property will need extensive rehabilitation to bring it back up to code, but the location and zoning can bring a substantial ROI if the project is followed through to completion. While this prospect may seem daunting to the undisciplined, the seasoned investor sees these types of challenges as opportunities for growth.


While there are many paths for you to join the ranks of other successful real estate investors, the road you choose is up to you. There are snake-oil sellers peddling real estate investment as an easy path to wealth, but it’s important to remember that it’s ultimately a business that requires dedication and focus to grow like any other. Never forget the skill, dedication, and effort needed to achieve success in the long-term.

 

Learn more about real estate tactics by visiting Colorado REIA