Plan your financial goals.
Before you buy the first property, or make your first analysis, you must determine what you expect from your investments. What are your financial goals? Take the time to understand your goals and make sure each investment is a step towards achieving them. If you are not sure exactly how to create financial goals, meeting with a financial advisor is an excellent first step.
Do not spend a fortune on books and seminars.
You have to learn some basic concepts before venturing into investment, but do not let the accumulation of information become the center of your action. If you have goals in mind this will make the process much easier. It is easy to stay stuck in the “research” phase and never take action. Instead, write down the specific questions you want answered or goals that you want to meet before you get into the next seminar book.
Look at a lot of properties.
Do not invest in the first property you find. Too many investors buy properties because they “look good.” Remember that you will not live there, so you should not make an investment decision based on your personal preferences. Make sure to do a comprehensive search for options. It starts with several properties, and then reduce the number on the basis of the established objectives.
Do a thorough financial analysis.
Keep it real. Look at different alternatives to determine what to do, it is not advisable to buy a property at a higher price or in less attractive conditions than what your analysis says makes sense. Beware of sellers who try to overestimate the value of the property through pro forma (estimated) data. You can use a pro-form to start the conversation, but make sure you know the real numbers before closing.
Do not try to buy a property that the seller is not motivated to sell.
How do you know if the seller is motivated? Look at the selling price. For example, if the property has been in the market for a year for $ 200,000, with little or no price reduction, the seller clearly is not very motivated to sell the property. However, if that same property has been in the market for a year and its price has dropped considerably, the seller probably wants to do whatever it takes to get the property out of hand.
Recognize the difference between real estate investment and real estate business.
If you are an entrepreneur or have a business of your own or are dependent, look at the investment in properties as a way to support your main job but do not get caught by the various transactions so that you neglect your main business. If that happens, you’ll face a bumpy road to return to stability. Unless your business is real estate itself or you are looking to enter the business full time, always remember that finding these deals is a means to an end, not an end in itself.
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