Wow! There is a lot of information available today in our new high tech world. Real estate investors or aspiring investors can instantly Google and find new gadgets to analyze properties, find properties themselves and also find an endless stream of information. If you Googled and found this article (congratulations) you will want to print it off and or save it for future reference.
What I am going to share with you today are the top 7 must do’s for any real estate investor to succeed in real estate investing. These are not necessarily in order with the exception of number 1.
You absolutely must start by first:
Create a written plan. I know, I know this sounds boring and you know what you want, THEN WRITE IT DOWN! The proof is astonishing that when plans are in writing you create a clearer vision of what you want, why you are investing and in turn you take the needed action to achieve the objective. It is clearer to communicate with other decision makers, spouses, lenders and your overall power team (this is another must have, as we are on the topic let’s list it next).
Create a power team. T.E.A.M. (Together Everyone Accomplishes More) to be truly successful in real estate investing you will need a support team, attorneys, accountants, realtors, tradesman’s and of course property managers. When you create an effective power team, you will want to share with them your WRITTEN GOALS. Once your power team are all briefed on your investing objectives, you just magnified and leveraged your efforts and your ability to accomplish these goals are stronger and much more obtainable.
Seek sustainable investments. Most people miss this step which I believe should be the first step in your written plan (safe and sustainable investments). You have read about all of the real estate investors who lost everything in the last crash… these are the people who, at least in part, missed this step. I always say you can find a cash flowing property in any city in the U.S.A. (especially now-a-days). Does it pass the safe and sustainable test? You will want to ask and find the answer to these questions.
Education. My wife always says (she heard it from somewhere and we believe it to be true) that the most dangerous person is the person who “knows everything”. If you are human you do not know everything, I certainly am learning something new every day. The real estate industry is rapidly changing and the demographics around investing change regularly as well. So stay on top of the markets and the latest trends. My greatest advice is to try and learn where and how people have failed. Many will gladly tell you their successes. Learning how people have failed and how they overcame the obstacles can be your most valuable lessons.
Identify the best markets. Similar to sustainable investments (number 3), in this instance it is all about location. The best sustainable properties in the best and most sustainable location will give you a great investment worth owning.
Invest for cash flow. I am not trying to alter your real estate investing plan that you have written. I am merely suggesting that whatever your objective is, you should always have the fail safe (cash flow) in place. You may want to do wholesaling, or fix and flip or long term capital growth investing (my personal favorite). Before any of these purchases are made, you always want to consider sudden market shifts or economic changes. If you purchase the property and for whatever reason you cannot execute your intended strategy on a timely basis, you should be able to rent it out and have a positive cash flow. This way you will always have a safe and sustainable investment regardless of the swift execution of your original plan or not. This fail safe has saved the investments of many.
Diversify. Market conditions and economic conditions can and do change sometimes very quickly. You may have heard the expression, “do not put all your eggs in one basket”. This is great advice. Spreading your investments into different markets and or types of investment properties will insure safety and overall sustainability.
When applying these seven principles with all your investments, you will be a happier and more sustainable investor. Happy investing!