People who are just getting started in the business of real estate investing often do so because they believe it will be financially rewarding. It can be, as long as you know what you’re doing.
As a real estate investor, you can generate a steady flow of income when you learn how to make the best decisions. Some of this learning comes down to experience, and some things will be best learned in study.
Does real estate investing require a lot of money to get started?
Not necessarily. In fact, there are aspects of the business that require very little. With experience you’ll learn how to work this business with virtually nothing out of pocket. The easiest way to do that is by selling contracts, or wholesaling real estate.
When you find a property that meets your guidelines for investing, one of which should be determining the value of the investment, think clearly and act quickly. If you do so, selling the contract to another investor-buyer sometimes requires no money out of pocket.
The goal in real estate wholesaling is to sell the home before the contract with the original seller closes. Profit margins may be less, but so is your involvement. Set yourself up for success by building relationships with investor-buyers who are looking to buy contracts.
These people might have the money to invest but not the time, and if you have the time and business savvy to seek out investment properties, the relationship you build could be priceless. These types of relationships, which may or may not be partnerships, create a win-win experience for both of you.
Where do you find these investors? In some cases they might be closer than you think. You may have a family member or close friend who has the resources to invest if you’re willing to put in the time. Again, you don’t have to form a traditional partnership business. You can keep your assets separate, but agree to divide the profit.
Do you divide 50/50? Maybe. Whatever you decide, be sure the arrangement is worthwhile for both of you so you continue to feel rewarded by the affiliation. If one or the other of you feels your contribution isn’t being fairly compensated, your relationship may be short lived. That goes for both your business and personal relationships.
The number one rule in successful real estate investment is DON’T GET GREEDY. Be fair-minded and reasonable with clients, partners, and sellers, and your business will be set up to thrive.