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Basic Tips for Beginners Investing in Real Estate

Investing in real estate can be a challenging process for beginners. However, there are basic tips that make it easier. Real estate is a major investment, so ensure you approach it with care and consideration. Following these tips will help you get started.

 

Which Investment Method is Right for You?

 

Most real estate investors choose one of these methods:

 

  1. Buying shares of a Real Estate Investment Trust (REIT)
  2. Purchasing actual real estate to rent out or flip

 

The differences between the two are huge, so this is a big decision.

 

Investing in a Real Estate Investment Trust

 

If you select the REIT method, then you’ll be purchasing shares of a portfolio of real estate. REITs have professional managers that select the real estate in the trust. This method is similar to purchasing a mutual fund, where you just invest your money and don’t have anything to do with managing the real estate yourself.

 

A real estate investment trust can...

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Episode 087 - Who You Need on Your Team When Investing

 
 

 

SHOW NOTES & LESSONS

Every Real Estate Investor needs a team of good people around them in order to get the deals done right.  Pick Your Team carefully and...

Always Treat Your Team Well!  That's literally the number one Rule when it comes to your Team.

Hire slow and Fire fast.  That's the number two Rule.  Take your time finding team members and do your due diligence.  Ask for referrals from other investors and ask for references from potential team members themselves.  You can't be careful enough.  If and when something does go wrong, Fire Fast.  Don't give second chances or you may be putting your entire business and your reputation on the line.

Who are your Team Members?

01) A great Real Estate Agent or Broker who understands investing

02) An awesome Title Company and Title Agent* 

*Some states require Real Estate Attorneys, so use friends and family to find a good one.

03) A very thorough Home Inspector

04) A...

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Episode 086 - 7 Rules of Purchasing Your STR Property

 
 

SHOW NOTES & LESSONS

When it comes to purchasing your Short Term Rental Property, Michelle's got 7 Rules you must know about the numbers.

#1 You make your money on the Buy: Meaning you never buy "hoping" the value goes up.  You must make your equity when you purchase the property by buying it for the right price in the first place.  Don't expect to make it up later.

#2 NEXT!  If the numbers don't work, Next.  If the location isn't right, Next.  If the seller won't budge on the terms or the price, Next.  There's always another property.  Don't hang on to this one like a dog with a bone.

#3 Never buy a property that's in perfect condition...unless you can still get it for 30% under the ARV.  Remember Rule #1: you need to make your money on the Buy.  Very rarely will you find a seller with a property in perfect condition willing to discount the price of that property.  Therefore, don't focus on properties that are...

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Common Real Estate Investing Mistakes

Although real estate may seem like a sure bet for anyone, many investors make the same few mistakes. Eliminate these errors from your investing activities and you'll be well on your way to accumulating the wealth you desire.

 

Avoid These Mistakes

 

1.  Poor research. Most of us do a lot of research when we plan our vacations or purchase a new television. If you were buying one that was worth $100k, you can bet you'd do even more research!  Well, you should be doing that when you purchase a piece of real estate, too.

 

  1. Inadequate financing. Real estate investors frequently like to wheel and deal, and their deals can have a lot of moving parts. Balloon payments, interest-only payments, owner financing, subject-to, and many others are commonplace.

 

  • To make a deal happen, we can get carried away doing everything in our power. Getting a great price doesn’t always justify the deal if the financing is inadequate. Are you really sure that you...
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Episode 085 - Property Intention & Strategies: Buying for Long Term Renters VS Short

 
 

SHOW NOTES & LESSONS

Today, Chris Villela is teaching us some of what she has experienced as a long term rental investor.  We talk about Exit Strategies, Holding Strategies, making your money on the "buy," and so much more.  Enjoy this episode and the interview. 

 

WHAT BOOKS, PRODUCTS, SERVICES, OR LINKS WERE MENTIONED...

Please use our Affiliate Links whenever possible and help support the show.  Thank you!

Recommended Podcast Episode that is paired with this one like a Fine Wine:

Episode 046 - Why You Shouldn't Treat Your Short Term Rental Like a Long Term Rental

 

 

There are no Show Notes for this his Episode...

Go To Our Download Page 

 

 

Show Transcript

[00:01] Over the last two centuries, nearly 90 percent of the world's millionaires have created their wealth through real estate. Here to tell you how you can ride this wave with less risk and less capital while creating greater income, is your host, best...

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Episode 080 - Are You Over-Improving Your STR? Why You Must Know Your ROI

 
 

SHOW NOTES & LESSONS

We are looking at a 2 bedroom/2 bath in Mesa close to everything. 

Now, purchase the Airdna Data for your property and let's figure out the ROI for a Short-Term Rental.

 

Wait... 40% ROI sounds a little too good to be true.  What did we miss?

So, the ROI on this property for a Long Term Renter is 22% and a Short Term Renter is 24%.  That's a LOT of work for only 2% more on your investment.  Figure out if it's worth it!

 

WHAT BOOKS, PRODUCTS, SERVICES, OR LINKS WERE MENTIONED...

Please use our Affiliate Links whenever possible and help support the show.  Thank you!

Airdna.co

Recommended Article or Blog Post Related to This Week's Podcast:

What Is After Repair Value (ARV) in Real Estate?  How to Calculate ARV—The Equation and What It Means to Your Profits

 

 

Get This Episode's Show Notes in a pdf form...

 

Go To Our Download Page 

Show Transcript

[00:01] Over the last two...

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Episode 063 - Why Now is the Best Time to Think About Retirement

 

SHOW NOTES & LESSONS

 

 

WHAT BOOKS, PRODUCTS, SERVICES, OR LINKS WERE MENTIONED...

Please use our Affiliate Links whenever possible and help support the show.  Thank you!

 

Recommended Article or Blog Post Related to This Week's Podcast:

The 2020 Wealth Building Summit - three full days of premier self-directed IRA education! At the Summit, you’ll hear from investors around the country who are using their self-directed IRAs to build wealth, secure their financial futures, and create a legacy for future generations. Three full days of education, networking, and inspiration!

 

https://www.eventbrite.com/e/2020-wealth-building-summit-cleveland-oh-registration-68835768637

 

https://www.daveramsey.com/blog/teach-your-kids-how-to-save-for-retirement

 

 

 

Recommended Podcast Episode that is paired with this one like a Fine Wine:

Get This Episode's Show Notes in a pdf form...

PICTURE OF PDF

Go To Our Download...

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Episode 059 - Addendums: What to Put in Them & Your Co-Hosting Contracts

 

SHOW NOTES & LESSONS

What Type of Things Go into an Addendum?

 

Title the Addendum to Link it to the Original Contract, Date, and attach to the original.  State effective dates and any additional payments (or state the fact that there are none).

 

Define everyone involved and what roles they play. Make it crystal clear who you are, what you do, and who your guests are and what part they play in your business.  Be clear in and make it understandable to those not in our business.

 

State clearly, in easy to understand language and using examples if possible, what each term is meant to do.  You may wish to restate things in your lease that are remaining the same and things you are adding to or taking away from that changes the original terms of the lease.  Terms usually add to your lease, like the fact that you won't be the main resident, but plan on using it to clarify what each party is responsible for and exactly what they have...

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Episode 058 - You're Doing It Wrong: The Biggest Mistake You May Be Making

 

SHOW NOTES & LESSONS

 

it can't be personal (ie. emotional) if it's business...

 

Do yourself and your business a favor and stop renting out your

personal space as soon as you possibly are financially able to.

 

Always pay yourself and even your kids for jobs that you perform. This is an expense for your business, which lowers the income, which lowers your business' tax burden. As long as your kids make under a certain amount, $12,200 in most cases, they do not have to pay taxes on it.

 

Get your mindset away from your old thinking. Employees and Self-Employed people think incorrectly about money - which usually is one of the main reasons they're stuck on the E and S side of the Quadrant!

 

THINK AND ACT like a business owner. Pay yourself! Hire the right professionals to get the job done! Don't step over dollars to save cents!

 

Stop Thinking Like an Employee

and

Start Thinking Like a Business Owner!

 

...

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Episode 056 – Part Two of You Can’t Fix Noise & Other Things to Avoid When Property Shopping

 

SHOW NOTES & LESSONS

What you want to look for when acquiring properties for you STRs or your Portfolio:

Look for a Neighborhood that Looks & Feels Good.

Check it out at all times of the Day and Night.

#1 Thing - as always - Location, Location, Location!

How's the Parking?  At night?  I look for Designated Parking!

What to Avoid:

Noise! - Whether it's being backed-up to a busy street or barking dogs, noise is one of your worst enemies when it comes to renting out a property.

Bathrooms - Optimally, one bathroom for each bedroom.  At the very least, no bathrooms that force you to walk through bedrooms.  No good!  Masters need their own bathrooms, always!

No converted rooms or quirky floorplans.  A house has to have flow & it has to be re-sellable.  You have to be able to sell fast and quirky floorplans and converted rooms JUST DON'T SELL WELL.

Stairs should be wide and clear, and everything should be standard.  Steps' risers...

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