Being a savvy real estate investor simply isn’t very easy. You must recognize and be familiar with ROI, Cash-on-Cash Returns, CAP Rates, Rent Multipliers, and NOI. You must know about the different dynamics in the market from a statistical and investment viewpoint. You must have the right connections to get the best deals.
Real estate investing runs the gamut in terms of risk and investment success.
The first rule of real estate investing, even before location, location, location, is be very careful with whom you are dealing. For some reason, real estate is fraught with unscrupulous characters, many of whom you’ll see on late night television commercials with their "no-money" down methods of becoming millionaires.
If you are seriously considering investing in real estate property, it means essentially that you will need:
- Investment capital, or a legitimate means of attaining some without putting yourself in debt.
- A good knowledge of the real estate markets and the neighborhoods.
- Good management, people and negotiating skills
- The ability to do repair work or access to people who can do it for you.
- Contacts in the construction trade.
Unless you are able to find, evaluate and buy houses that are either in foreclosure or fixer-uppers, which can be turned around quickly, you will most likely serve as a landlord for the property while it increases in value. Be careful to whom you rent because your property must be well-maintained to be successful in the Orange County Investment game.
Since legitimate real estate investing means having some money to make money, you need available capital. For this reason, many people go into real estate after coming into a sizable amount of money. For example, empty nesters who sell a large home for $500,000 and buy a smaller condo for $250,000 have money to purchase another property or two.
Make sure to research your location. Go to local town board meetings, do research in libraries and go on the Internet to find out as much as possible not only about the location today, but about plans for the area over the coming years. Make sure you have the right partners. Your real estate professional, your attorney, your property manager, your contractor and the rest of the team are vital to your success.