7 Simple Steps To Real Estate Investing

Whether you're brand new to real estate investment or a seasoned pro, knowing these 7 Simple Steps to Real Estate Investing is vital.

First things first…

  • Real estate is a long-term investment, not a get-rich-quick scheme. However, if you master the fundamentals and put them into practice, you will be able to achieve all your dreams and goals with ease.

  • There is no way the real estate bubble will bust! The real estate market, on the other hand, will fluctuate and alter — just as it has in the past! What's "hot" right today could become ice cold in the following three years (or perhaps even 3 months). However, there are strategies to protect your real estate investments from the effects of inflation. It's actually fairly straightforward.

Did you know that in 1975, the median home price in the United States was $33,300? The median home price in 2005 was $195,000. In the past, the average home doubled in value every seven years. It should be considerably over $200,000 if you do the math.

OK… Having stated that... The real estate market WILL evolve, and what "works" in real estate today may not work in the future... The rental market was robust a decade ago, but it has slowed in recent years. We're getting set for another turn.

Real estate is a cycle, and cycles may be predicted to some extent. You can turn your real estate business into a cash-generating, profit-pulling machine that runs itself in response to changing real estate market trends if you have predictability. Real estate is still a viable source of income. In fact, this is as perfect a moment as any to begin investing in real estate.

However, you must make smart investments. Sure, you may earn a lot of money in pre-construction, but what if (no, not if – when) the market shifts and there are suddenly 35 identical properties for sale in the same building on the market? How long can you afford to keep the property in a negative cash flow situation?

Or how about acquiring property that is 'subject to'? Sure, it's a good approach, and lenders might be willing to overlook the "due on sale" clause if interest rates are at rock-bottom levels (you know, those sellers who you're generally taking property subject to don't always have the lowest interest rates, right?) Don't you believe lenders would be MUCH MORE willing to use their option to force you to pay off the 6.5 percent note if interest rates rose to 10-11 percent?

Simply put, you must be familiar with the fundamentals - tried and proven approaches, strategies, and systems that have worked in the past, are still working, and will continue to work in the future. You must have all of the tools in your bag in order to go with the flow and avoid being impacted when real estate markets shift (which they are currently happening, in case you didn't get the word!

Step #1 - Develop a strategy: Determine your long-term real estate goals (i.e., retirement and wealth accumulation) and your short-term real estate demands (i.e., making money in real estate). Then, create the necessary entities and implement the plan.

Step #2 - Figure out who your target market is: You can't please everyone in the real estate market. Start investing in the foreclosure market if you like foreclosures. If you want to be a landlord, concentrate your real estate marketing efforts on out-of-state owners.

Step #3 - Real estate is not a get-rich-quick gimmick, so be steady and persistent. Real estate is a great way to build wealth over time and put money in your pocket right now. To see real estate success, you must keep to your plan and stick to it. You must also continue to advance your education and experience.

Step 4 - Don't get caught up in "Analysis Paralysis": Quickly learn to examine properties. Don't get bogged down in overthinking. It's actually fairly simple: What is the property's value? What repairs does the property require? And how much are you willing to pay for the property? It's all about the numbers!

Step 5 - Become a financial master! : Real estate is a marketing and financial business. You must educate yourself on mortgages, interest rates, and available financing options. You must understand how to use money to negotiate transactions and sell homes.

Step #6 - Develop your problem-solving abilities: Because you can solve people's problems, you will be able to get real estate transactions that others won't. Anything goes on the real estate playing field. You must be prepared!

Step #7 - You must continue your education: It is important that you are always investing in your education and learning new tactics, strategies and tips that will help you make more in real estate.