Becoming a successful real estate investor requires being able to find good real estate investment deals and put them together. Your job is not to become an closing attorney, a management expert, or a repair person. Use professionals!
You must learn how to find the true value of real estate and trusted resources with information that will help you make better investment decisions. Realtors, appraisers, and banks determine what a property is worth by looking at comparable sales usually three to five sales of similar property that has recently sold in the same neighborhood. You must be able to do or have a trusted professional provide the same. Investor friendly real estate agents usually specialize in investment properties. Most of them are investors themselves and have a few properties of their own. They understand the numbers and what it takes to get you into the right asset type. Not all investments are created equal. You need to be able to assess the true value of properties based on when you expect to sell.
Leverage
Leverage is very important for investors because the less cash you put down on each property the more properties you can buy. If the properties go up in value your rate of return goes up.
If you are a long term real estate investor leverage will work in your favor if the markets in which you invest appreciate in the long run and your income from the properties can pay for most of your monthly debt. Understand the Strategies to limit risk.
To limit risk become educated in your local real estate market first target neighborhoods and or specific asset types.
With this information it will help you make better investment decisions.
Exit strategies
It is important not to guess the future of a local real estate market you need to have a clear plan in mind when purchasing property. As a real estate investor you must know exactly how you will exit the property before you buy. And have a backup plan or two in case the first course of action doesn’t work. You must know your market and your plan before you begin to invest.