Thinking About Investing in Real Estate? Take 5 Tips from a Pro ...

Posted by Eranch on Sep 22, 2011 in Real estate news | 0 comments

Filed under: News , Buying , H?w T? , Investing W?th home prices ?nd mortgage rates surfing th? bottom ?f th? real estate trough, ?t?s n? surprise th?t folks w?th money t? spend ?r? jumping ?nt? th? investment market. According t? a recent study b? M???.com , real estate investors ?r? buying three houses f?r ???r? one house b??ght b? someone f?r th??r personal ???. And ?t?s a trend th?t?s l?k?l? t? continue f?r th? foreseeable future. S? AOL Real Estate invited th? experts fr?m BiggerPockets blog t? h?l? ??r readers understand th? opportunities??nd pitfalls?around real estate investing. In th?? column, veteran investor Michael Zuber ???l??n? wh?t h? w??ld d? ?f h? w?r? starting out today. Th? very first thing I w??ld d? ?? g?t down ?n m? knees ?nd thank m? lucky stars t? b? beginning m? investment career ?t absolutely th? best time ?f ??r lifetime. Remember, fortunes ?r? m?d? b? investing ?t depressed levels ?nd ?t th? bottom ?r near bottom ?f cycles. Step One: Analyze Y??r Market & Learn Wh?t Deals Really Ar? Th? next thing I w??ld d? ?? g?t ?ff m? butt ?nd ?t?rt doing m? basic homework. I w??ld g? out ?nd see n? less th?n 50 ?nd probably 100 properties ?n m? investment area ?f ?h????. I ?m n?t kidding! I w??ld immediately build a spreadsheet w?th data ?n n? less th?n 100 properties. Things l?k? Prices, Expected Rents, Repair Budgets, etc. Th?? w??ld give m? th? basis ?r foundation t? understand wh?t ?? a g??d deal, wh?t ?? a b?d deal ?nd wh?t ?? a gr??t deal. Step Two: Establish Y??r Deal Selection Criteria Aft?r I h??? built m? basic understanding ?f th? market I w??ld d???d? ?n wh?t criteria I want t? ??? t? d???d? ?n wh?t ?? ?nd isn?t a g??d deal. I recommend ???r? investor pick one metric th?t ?? easily transferable between property types. F?r m? th?t metric ?? ?yield,? ?r m? expected return ?n ?ll cash outlaid t? secure ?nd rehab a property. Today I personally look f?r expected yields ?n excess ?f 20% ?n m? market. Step Three: St?rt t? M?k? Offers Aft?r understanding m? market ?nd deciding ?n m? criteria f?r identifying a gr??t deal I w??ld ?t?rt m?k?ng offers ?n properties th?t met m? criteria. I w??ld hold f??t t? m? criteria ?nd n?t l?t bidding wars drive up prices. In fact, ??? ?h??ld ?nl? expect t? g?t 1 out ?f ???r? 10 properties ??? m?k? ?n offer ?n. If ???r success rate ?? higher th?n th?t I believe ??? ?r? offering t?? much ?n ???r properties. B? following th?? strategy I ?m convinced I ???ld secure four investment properties w?th government-backed loans inside ?f 90 days ?nd secure 10 properties inside m? first year. E??r? property I b??ght w??ld h??? a 30-year fixed interest rate ?nd I w??ld b? a very h???? man. A? ?n Alternative: Find Passive Real Estate Investment Opportunities Now ?f m? market didn?t offer th??? types ?f returns ?r I didn?t h??? th? time t? devote t? learning a n?w market I w??ld still find away t? participate. I w??ld find ?n investor w?th a proven track record, a simple-t?-understand process ?nd become a passive investor. Th?? w??ld insure a decent return w?th a lot less headaches, reduced risks ?nd still give m? th? upside I want. In th? ?nd ?f I w?r? starting today I w??ld n?t l?t th?? investment cycle pass m? b?. I w??ld become a very active investor ?n m? market ?nd ?f m? market didn?t offer returns I w??ld find a way t? b? a passive investor ?n another market th?t offered gr??t returns. Michael Zuber ?? ?n active b??-?nd-hold real estate investor wh? still h?? a full-time job. Michael ?? n?t ?n agent ?r broker, ?nd simply uses th? internet ?nd agent relationships t? drive h?? business. H? currently averages ?t l???t one deal a month ?nd h?? developed laser focus ?n h?? 5-step process. Y?? ??n learn more ?b??t th? process ?nd past deals ?t www.wealthbuildingpro.com . Th?? post originally appeared ?t BiggerPockets.com. See ?l??: Tempted t? Invest ?n Real Estate? Read Th?? First College Town Real Estate Investments Score High M?rk? Young Real Estate Investor: Wh?r? t? Stash Th?t Extra Cash? More fr?m BiggerPockets: Deciding Wh?n t? Sell Y??r Rental Property Ar? Home Inspections N??????r? f?r Real Estate Investors? More ?n AOL Real Estate : Find out h?w t? calculate mortgage payments. Find homes f?r sale ?n ???r area. Find foreclosures ?n ???r area. G?t property tax h?l? fr?m ??r experts. Photo: Images ?f Money , flickr

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