Becoming a real estate investor is not as difficult as you think even though you don’t have the capital and experience. Sound too good to be true, right? There are many ways of getting started in real estate investing. One of the easier and getting popular way is to become a real estate bird dog and get started learning real estate investment from seasoned investors. You should consider real estate bird dogging as the first step of your investing career if you are serious to become a real estate investor. Why? Because real estate investment requires you to have the knowledge and experience in addition to sufficient capital. As a real estate bird dog, you get the opportunity to expose yourself to real estate investment without buying properties. It is basically a risk free method of real estate investing. Depending on how much effort you are willing to put in, a bird dog can easily make few hundred to thousand dollars a month by finding profitable deals for the investors. Besides, you can start your bird dogging in your spare time, mainly during your weekend without having to give up your day job. And you get the opportunity to sharpen your personal attributes especially communication skills during the process. If you intend to be a part time real estate investor while holding a day job, please be reminded that there is no quick buck in real estate investment. It is crucial that you treat your real estate investing as a business as it may take months if not years for your business to bring in significant cash flows before you can quit your 9 to 5 job. So, it does pay for you to become a full time real estate investor.
If you have been looking into different investing options to help secure your financial future, you might be wondering why invest in real estate. There actually are several reasons that will make you change your mind and start investing immediately. One of the first benefits of investing in real estate is because it gives you financial leverage. If you are not familiar with this term, it simple means that you are minimizing the amount of cash you need for a transaction. The way you guarantee you will get great leverage is by knowing you will be able to sell the property for cash. You really are borrowing to buy, which means you are not using your own money. Another reason why invest in real estate is because of the inflation resistance. Although this is not as high as it was a few years ago, it still has a fairly high resistance to inflation. If you compare other goods around real estate, the real estate prices rise much faster.
You’re purchasing a rental property’s income stream, so be sure that the numbers you rely on later to calculate cash flow are truthful and correct. 2. Appreciation – This is the growth in value of a property over time, or future selling price minus original purchase price. The fundamental truth to understand about appreciation, however, is that real estate investors buy the income stream of investment property. It stands to reason, therefore, that the more income you can sell, the more you can expect your property to be worth. In other words, make a determination about the likelihood of an increase in income and throw it into your decision-making. 3. Loan Amortization – This means a periodic reduction of the loan over time leading to increased equity. Because lenders evaluate rental property based on income stream, when buying multifamily property, present lenders with clear and concise cash flow reports. Properties with income and expenses represented accurately to the lender increase the chances the investor will obtain a favorable financing.
There are many ways of generating equity but the best way is buying into equity. You can do this by searching for a seller who wants to dispose of his property and that he is willing to renounce his equity for lesser that its full value. 4. Appreciation. Real estate investment is all about purchasing the right realty in order to realize great profits. This can be a pretty difficult at times. This is because real estate is speculative and risky. You can be up on one point and down on the other. 5. Possibility. As you have read, real estate investment is pretty risky. If the realty did not appreciate in value, what will you do? There are different outcomes available in real estate investment. They include overwhelming profits, average income and terrible loss. The latter is the most debilitating of them all. 6. Limited Liability. One of your concerns about real estate investment is the manner in which you can limit your liability. Perhaps, you know already that the real estate investment world is susceptible to unlimited liability. Be cautious of this fact. Be sure to limit your liability up to the maximum extent.
Bids can be in increments of $1000 or more depending on the financial details of the property. People who bid, in most states, must have at least 5% of their bid on their person, in cash or bank check, to put down as earnest money if their bid is successful. As the investor, you will want to determine the maximum amount you are willing to pay for the property before you attend the proceeding. Then you will need to bring five or ten percent of that amount with you on the day of the auction. It’s a good idea to attend a few auctions in order to determine some of these important details. You must consider the possibilities of damage that may be present in the dwelling, since you will most likely be unable to view the property, unless you visit the house to talk with the owners prior to the auction, during the pre-foreclosure process.
If you’re not getting the results you want, a paradigm shift may be in order. Your paradigm is formed over the years by all of your thoughts and past experiences: the way you were raised, your mind-set, what you were taught, everything you believe in, how you were trained, etc. That is your paradigm, and as such your paradigm is very important. It determines what you believe is possible and impossible. What is a Paradigm shift? Your paradigm has a great deal to do with your success in life and is a prime factor in getting started in real estate investing or anything else of worthwhile achievement. Ironically, the biggest challenge most people face when implementing some of the very best in investment and business ideas, including when getting started in real estate investing, is NOT in executing the actual steps (that’s often the easy part), but rather in generating enough courage and faith to believe that some of the things theyre advised or are learning to do are actually possible.