The first thing to know before jumping into becoming a real estate entrepreneur is to have a broad knowledge about the market.
Once you can good understanding about the market in which you will be working, it is time to decide whether to deal in residential property or commercial property initially. Experts suggest to start with residential property as it is less complex and most of the buyers have experience from buying their own home. Take note that even residential property is segregated in several categories.
Next, it is important to decide whether you want to become a passive investor or an active investor. In the first case you can hold the private loan note secured and you can also do it through seller financing, money lending and tax liens. It is to note that you need to monitor compliance to contract terms of each deal.
In the active investor case you need to learn multiple investment strategies. Even you can strike as landlord and then understand the options like whether to go for triplexes, duplexes, single-family houses or quads. You also need to decide whether you hire a property manager to manage and maintain it or do it by yourself.
Apart from all these it is highly important to develop your own business plan before jumping into the market with the intention of reaping profit. Experts suggest to make a list of your strengths and weaknesses too like your work habits, your real estate investing, your skills and so on. Try to be honest to yourself.
Never forget that the market is filled with opportunities and threats too and those are beyond your control. You may get a chance to buy an inexpensive property in a neighborhood or a major infrastructure project may take longer than estimated time to complete and this may disrupt the neighborhood.
Last but not the least, it is very important to understand the local market as well as know who are your target population, either for renting or buying the property. You also need to know the neighborhood scenario like the flood plan, the employment picture, amenities and more. Learn as much as possible about these segments as it will help you closing deals with buyers.
It is also to note if the property is taking more time to be sold, it is better to rent it out as it will bring some regular cash flow.
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