Real Estate Investing – Is It Right For You?

First off, goals and motivation – consider that as the first springboard before you even pull up your sleeves for real estate investing. Goals because it will serve as your beaconlight in your real estate journey. And motivation to reeve you up every step of the way. Never ever think of real estate investing as a walk in the park nor a sip of Peña Colada at the beach side of Maldives.

Nope!

Goals And Motivations

Real Estate is a tough nut to crack before you will savor the sweet flavor of its fruit. Nevertheless, beaches, hummock, Peña Colada and a walk in the park is not really a far flung pot of gold at the end of the rainbow – in other words, it’s not impossible. Only and only if you are willing to bleed or even bleed white for it!

If investing in real estate was easy, then everybody would be doing it. And most people who teach real estate and quote some questionable quickie riches in real estate, actually earn money from selling CDs, Books and Memberships – not from Real Estate itself.

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Do a great deal of research before even tipping your finger into the boiling pot of the real estate deals. Real Estate business offers should be crafted well, first off. The offer should work in your favor but should not undermine the interest of others.

Real Estate has a broad spectrum of learning curves. Just the documentation itself will give you the willies of your life, add to that the legalities that you have to learn and undergo such as taxes, encumbrance and delinquencies.

Depending on what side you are in the real estate deal, you need to learn to deal with some of the blows. If you are into foreclosed property selling and you have spent a great deal of time visiting properties. And when time comes for you to assess a property, the appraisal comes back too low for you to profit from it. Or maybe an inspection could uncover structural problems that’s too expensive for you to deal with. Or the bank and lender did not approve your loan.

More often than not, there are only a few transactions that are not trouble-free. So, real estate will make or break you. It will test your tenacity, resourcefulness, personal convictions and patience. Be clear on your motivations as it will be the one to give you that extra push when you get into a hurdle later on.

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Find Your Niche To Fit In

Real Estate has many facets in it. In fact, there are at least 5 major ways for you to profit from real estate deals – Buying and Selling (otherwise known as flipping), Rentals, BrokerageREITF (Real Estate Investment Trust Fund) and becoming a Real Estate Agent. And the juiciest of all these are Rentals.

Rentals will give you one of the most powerful incomes in the world – passive income – for as long as you want. Flipping is a one-off business deal, you buy or build the property and you profit from the mark-up. Brokerage is where you act as an agency who works as the central processing unit of the whole real estate transactions – selling, documentation, titling, transfers, legals, taxes and all. REITF is the stock market version of real estate. And lastly, the fastest way is to become a real estate agent where more often you work for a real estate brokerage firm or a contractor. You don’t need any capitalization in becoming a real estate agent.

The above are just few cogs where you can try to mesh in. But there are still some bumps along the way about you.

If you are the type that doesn’t enjoy working with people and then taking landlord duties, then real estate or at least rentals might not be for you. If you can’t bear stress, do not take commercial properties and some other property that seems risky.

Personal Life

Time is another capital that you have to shed when investing into real estate. A cosmetically-challenged apartment unit will demand considerable time from you, mostly for repairs, documentations, adverts and the likes. The more time you spend with it, the more profit stays in your pocket. However, if you are working your ass-out to exhaustion, it’s high time for you to hire someone to work on your behalf. This might mean lower profit and delay in project completion but this would also mean a lot to you and your family – unless they understand.

Buying an investment property will probably take a bite out of your free money, the bucks you use to have fun. Are you willing to give that up for a moment? Fewer dine-ins or night outs, less vacations, significant cutback on entertainment – is it worth it to you to eliminate these thing while you build your investment properties.

Your Interior Art Flair

This is just an extra and is not a big deal unless you rent out your unit in a transient manner or AirBNB type then you need few extra creative juices to ornamentalize your interior. But, more often properties are sold bare floor, walls and ceiling as buyers have there personal effects and things with them and have their own taste of interior design.

Funding

Now you have to face it. The reality of real estate investment is money upfront – it takes money to make money. And the investment is significant. We are not talking of hundreds, or thousands but millions of investments.

The question is, how long can you handle a negative cash flow before it will hurt you financially?

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Borrowing from the bank is very customary, but it is also the most disheartening experience if you get declined for a loan. Personal financing either is as elusive as a daydream – you wish you could.

And if you can, really talk to yourself and ask how much are you willing to give and to risk? Then maybe you can start getting yourself wet. But if you cannot deal with a whole splash of setbacks and risks – some other investment strategies are just waiting for you at the corner!

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