The Real Estate Market is a vehicle that I believe gives the most ideal chance for people of average American to fulfill their goals and live the life they are supposed to live. It’s not always all it’s claimed to appear on HGTV If you stick to the basic principles of investing, I’m able to guarantee you that you’ll be successful over the course of time.

There isn’t any particular timetable you should follow to ensure you’ll have X net worth in a year, however I can assure you that one thing: time focused in time (consistency) will produce the results Donald Trump would call YUUUUUUUUUGE. Don’t waste any more of your time, and jump right into.

Profits are made upon the purchase: The Profit Is Made on the Purchase, ever heard the expression “you make your money when you buy”? This is true in real property. It might seem easy, but if you do not find a home which is less than market value, you’re likely to be in trouble. Don’t get me wrong, there are many other innovative ways to get deals completed (even when you pay more than the market value), but for the purposes of this article, I’d like to make it SIMPLE. As you advance in your investment skills and become more creative, you’ll be able to think of new ways to invest and create deals that novice investors could only think of. I also look for properties that I could enhance (kitchen bathrooms, etc.) in the current structure or find something could add value (like creating an additional bedroom or bathroom).

Buy multi-unit > Single Family This method is determined by the method you decide to use. For the single family residence (single household residence) Flipper, this doesn’t be a good idea, as we’re assuming you’re an investor who seeks long-term growth and cashflow. Although a multifamily home is larger and more costly, they’re actually more affordable to buy and could be more secure. Also, there are many doors under one roof, which means the potential for cash flow can be (insert Donald Trump voice) huge. If you own one house that is a single-family home and your tenant leaves, and you lose the entirety of your cashflow. However, when you have for eight or more people living in the same house, your loss will be less significant.

Be strategic, not emotionally driven Be Strategic, Not Emotional As a real estate agent, I have seen families purchase an apartment due to “fall in love with the home” This makes sense in this scenario but when I don my investor hat, I’ll need to ensure that I inform that you should leave your emotions behind. This is a game of numbers and there is a specific set of rules that we need to concentrate upon when purchasing a house. Everyone will possess a different set of rules or guidelines, and you have to take the best decision for your long-term strategy. Be patient. It’s always more beneficial to wait to find the perfect deal even if it takes nine months to find it, than to get an unsatisfactory deal and then lose cash every month.

Location, Location If there’s any more popular expression in the field of real property, the phrase is this one! One thing I’m going to affirm is that clichés have to serve a purpose, and they have proven to be the same purpose time and again. Make sure you’re aware of the area (especially in the case of investing from outside the state)

Find properties in which You can Build Sweat Equity Then Sometimes, this is an excellent place to begin when you’re just beginning to get into investing in real estate. The phrase “house hacking” (coined by Brandon Turner of Bigger Pockets) is one of the phrases that come to your mind. This is when you purchase an apartment that you reside in while you work to fix it up and increase the value of it, or you can increase the value of your home by renting individual rooms. In any way you think about it, it’s an excellent idea to locate an apartment or home with some improvements that you can take care of to give some effort into it and earn the most value for your investment of time and effort.

Create a smart Renovation Plan If you intend to carry out this work at a large scale, it is advisable to think about how you can create a system from your remodeling. One idea to consider is applying the same color of paint and cabinet design flooring, etc. The main focus should be on bathrooms and kitchens. They are the areas where you are going to reap the greatest return on investment. Also, you could consider taking a sledgehammer to an area you’d like to knock down. It’s partly because it adds visual appeal to the property and also, let’s be honest, we will always want to smash a sledgehammer into walls :) — You also have no second chance to impress a potential buyer and so taking the time to maintain your curb appeal in your property is vital. A lot of buyers will make a choice within the first 30 seconds of leaving their vehicle to decide if they would like to buy your house or not. Likewise, if you’re keeping the property as a rental doing using the BRRRR method, the appraiser will have an excellent first impression with a clean exterior and neat.

Enhance rent out properties faster — As a buy-and- hold strategy, one thing you can think about to let your house rent out faster is to include all appliances in the kitchen (this is a common practice for our market located in Green Bay), but perhaps you can add washer and dryer as well. You could also consider adding Wi-Fi and cable to the mix. The cost of these will be included in the rent you pay, however, the perception value of the renter could be enough to tilt the odds in your favor and have your house rented sooner.

Take Care of Your Property — A lot of investors need to begin with managing the properties they own. It’s okay! It’s not a problem doing this, and in some cases it can provide important lessons and provide you with an understanding of what to look for in the event when you have to engage a property management company. However, at the beginning, ensure that you screen your tenants carefully. There are tenants who “know the system” and this isn’t their first experience. Unprofessional screening can result in an unimaginable nightmare. That nightmare will be with you for the duration of your investment career. I’ve seen it many instances where one bad rental property has prevented one away from the role of a landlord, and forced them to fall back into the realm that is “average” and give up on their goal of cash flow investment. For excellent resources on this subject, visit the forums and the book store.

You can have a “$h*T Hit The Fan” Fund — The biggest mistake many investors who are new to investing make is to underestimate the flow of cash. If they receive $1,000 to rent, however, the mortgage they have is only $400. The typical response is that they’re cash flow $600 …. WRONG!!! I would suggest making a monthly withdrawal (I recommend around 20 percent) to save funds for the event that things happen to go wrong. It’s not a question of when, but if. One thing I can inform you about is that when things go wrong with the cash in the account of the bank, it makes the issue appear simpler than it should have been.

Keep your cash — We’ve said it before, CASH IS KING. We would like you to keep the most of it is possible. The greater the amount of cash you have, the more leverage you have in turning this money into cash flows. Through the purchase of assets, you can turn your cash into down payments. If you are considering properties, always choose the lowest option for down payments you can locate, which remains within your comfort area of equity within the property. One strategy I am a fan of to discuss is the Brrrrrr method (this is a topic to come back to). This lets you take all the cash from a property, which allows you to put it in another property that will help you to build your wealth. While maintaining at least an equity of 20–25% in the property.

Do not over-leverage — One method of playing on fire is to leverage all of your properties. While we mentioned making the most cash is possible in the article above and holding a 100 percent leveraged portfolio is not an excellent idea. It’s one of the main reasons why the 2008 crisis. In the “hot” market with 100 percent leverage won’t leave you with enough time to implement the exit plan. If you can target an absolute minimum of 15 discount, you are building yourself a cushion in case the market declines. Leverage is a powerful instrument that can be utilized in order to increase your portfolio’s size to an enormous size However, with a variety of options, it should be utilized with care. An alcoholic glass per day is a good idea for one, however, 3 bottles of wine per night could create an issue. The same is true for leverage.

Know the Market Exit Strategies and Volatility Always go into a trade with at minimum, at the very least, 3 or 4 options for exit strategies. In the event that you already have such strategies, I’m willing to guarantee that you’ll have no issues to be aware of If you have no exit strategies I’m almost certain that you will encounter difficulties. Prepare for the unexpected. Remember that markets will determine the most effective strategy to adopt. For instance I’m sure you’ve heard that a down market could be ideal for rentals since many people have their credit ruined and are unable to obtain financing, but are able to afford rent. I can recall a tale of an apartment I bought which had been a quick sale. My plan was to remodel the property and generate around $32,000 from the property. Without going into many details, we ran into some issues with the alignment of our private funds and I was left with $40,000 of this property without funds to make renovations. Luckily, I followed my own advice from #1 in this article, and I believed it was a good investment. I was able to turn the property around, and then list it for sale as is in the MLS and then sell it for the sum of $10,668. (I am planning to write an article on this shortly)

Hope this helps people who are contemplating entering the game of Investing in Real Estate. or are playing around but haven’t found any success. It is also feasible for you to make investments in real estate, without the burden of dealing with all of these. This is an entirely private lending game (which we will have an article to come on that). However, I wish you all the best with your investment ventures. Cash flow is the king!