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Three Things Every Real Estate Investor Should Know

Feb 10, 2008
As you get more immersed in real estate investing, you'll hear it over and over - real estate investment isn't like any other kind of investment. Yes, at the core of all investments, there's money and risk involved. However, the major difference is that in real estate investing, you are responsible for the work required to make a return on your investment unlike investments in the stock market for example.

Your real estate investment triumph, however, depend some key points you need to learn when investing. No matter which form of investment you're in, you need to learn few essentials to be successful.

How to Locate Properties

Properties are the lifeline of real estate investing. Without them, there's no money to be gained. Your success hinges on your ability to find properties: not just any property, but solid investment opportunities, better known as deals.

Just because you see a property for sale doesn't mean it's a good real estate investment. You'll need to find out more information about each potential deal before you can say with certainty if it's a good investment deal or not. One obvious thing you need to check is the structural integrity of the house. Of course, buying different investments, for example a tax lien certificate, has another set of consideration involved about them.

How to Make Deals

Once you start finding investment properties, you must be able to negotiate a deal that works in your favor. Otherwise, you'll make little to no profit; in some cases, you might even incur losses.

If you're not good at negotiating, take some time to read few books on the subject. But experience is still the best teacher, so make an effort to befriend seasoned investors and ask them if you could be their apprentice for some period of time or you can just ask them to bring you along one of their deals. Once you learn core negotiating skills, you'll have the ability to go into a deal and work out the terms so everyone walks away happy, mostly yourself.

How to Invest

At the core of all investments, people spend money to earn more money. There are tons of options how you can do the core in investing in the real estate investment business. Fix-and-flips, foreclosures, distressed properties are among the favorite choices.

It's an advantage for investors if he knows what strategies he can use for each different property acquisition. You must have an idea of which ones to use before you make a deal. Don't forget to check the owner of the property, evaluate the budget at your disposal, and consider your goals of investing.

Note also that you should weave different exit strategies for each property acquisition; your exit strategy will depend on your goal of investing. When you want to receive extra monthly income from your investment for example, you can choose to rent your property. There is also a different strategy you can use if you want to build wealth for example; you can buy properties that have short turn-around so that you can buy and sell as much as you can for a given year.

Getting materials to study about investing in real estate is not a problem these days; there are books, magazines, and the Internet provides valuable insights. Learn everything you can about this investment opportunity. Once you've learned the skills we've mention above, you're set to make your first deal.
About the Author
About the author: Jacques Coquerel is a real estate investor based in Atlanta, Georgia. He has made more than 750 real estate transactions since 1996. For Real Estate Investing Tips get his free course Real Estate Investing Free Course.
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