No Comments

10 Habits of Successful and Effective Real Estate Investors (2019 Update)

No real estate investor intentionally sets out to be mediocre. No one wakes up and says, “You know, I really just think I’m not going to try today”. However, the fact remains that some real estate investors are much more successful than others. How does that happen? It really comes down to having the right habits, and being able to act on knowledge of the real estate market. What are the habits of the most successful real estate investors? Let’s take a quick look.

Investment Plan

Highly successful real estate investors always have a plan. They never fly by the seat of their pants. They realize that being unprepared in this industry is the same thing as being uninformed. You’ll need to have a plan that details how you’ll reach your short-term goals, as well as your long-term goals. Of course, that means you need to identify what those goals are before you start investing.

Market Knowledge

The most successful real estate investors have in-depth knowledge of the real estate markets in which they invest. While they might be active in more than one market, they take the time needed before getting into the market to understand the various drivers of the underlying economy, the shifts in the real estate industry and more. You cannot afford to invest in real estate if you’re unwilling to take the time to build that same level of knowledge yourself.

Honesty and Integrity

There’s no codified set of ethics that real estate investors must adhere to, but that doesn’t change the fact that the most successful investors are honest and act ethically. They’re upfront and take care of their reputation. They understand that a reputation for lacking integrity, dishonesty or unethical actions and decisions can cripple their efforts.

They Specialize

It’s tempting to think that most successful real estate investors are all over the board. It’s true that some of them are, but you’ll find most of the really successful ones specialize in a particular area. This allows them to build very deep knowledge about the area and then exploit that knowledge to make savvy investments that really perform over their preferred timeline. Think of this as apprenticeship training – you master one area, and then move on to another, eventually mastering most or even all areas.

Respectful

While you might think that real estate investing is about money, or real property, it’s actually about people. The most successful investors understand this intrinsically, and treat everyone with respect, from renters to business partners. They also understand that being respectful is the best way to gain referrals, which are responsible for a large percentage of their financial success.

They’re In the Know

The notion that you’re done with education when you get out of school needs to be eliminated. The most successful real estate investors are committed lifelong learners, and are willing to stay in the know about pretty much anything that will affect their markets, their investments or the real estate industry itself as a whole. This refers to everything from laws and regulations to shifts in political power to buying and selling trends for individual neighborhoods.

Knowledge of the Risks

While real estate investing doesn’t carry the same risks as playing the stock market, there are risks involved. Savvy investors not only understand those risks, but also know their own risk tolerance and tailor their investments toward those elements.

They Don’t Go It Alone

No investor is an island, and the most successful of them build a team to support their efforts. This includes a professional, reputable accountant who can help them handle the sometimes very complex taxation matters that go hand in hand with real estate. They also network with others, develop contacts with attorneys, form relationships with mentors and business partners, and more.

Now that you know more about the habits of the most successful real estate investors, you can begin to make progress toward securing your own financial future.

No Comments

7 Tips on How to Grow Your Real Estate Portfolio (2019 Update)

Looking for a way to ensure your retirement is comfortable? Interested in building a portfolio of real estate that ensures you always have a constant stream of income? Buying the right types of properties, and following a few simple tips, will help ensure that you’re able to grow that portfolio and safeguard yourself against the vagaries of the economy over time. The tips below will help ensure you’re able to make smart decisions about your real estate investments.

Do You Have Positive Cash Flow?

One of the most important tips here is to make sure that you actually have positive cash flow. You shouldn’t have to rob Peter to pay Paul, so make sure that you’re in a stable position with any other properties owned before you move on to purchasing another property. Maximize the income potential for the properties you hold currently before you expand your portfolio, or you could miss out on important financial gains, or overextend yourself.

Check the Math

The numbers need to make sense in any real estate transaction. If you’ve been investing for more than a little while, you’re aware of how quickly things can change, and you understand the types of challenges most likely to crop up during this period. It’s fine to run hypothetical numbers here, but they should only be used for general forecasting. You need accurate math to make real decisions.

Management

How will you manage the new property in addition to the other properties in your portfolio? If you have a management team in place, this will likely not be a problem, but if you don’t yet have a team (you’re a new investor), you need to have a plan in place for managing all aspects of the property you’re purchasing.

Diversification Matters

This is probably one of the most important rules of investing, and it applies to real estate just as much as it does to anything else – diversify. Look for a mix of different property types. Don’t put all of your money into large, multi-family developments, or all of it into residential real estate. The right mix will help improve the value of your portfolio, but more importantly, will help provide protection in the face of market fluctuations.

It Makes Sense for You

Avoid the trap of buying a property simply because you like it, or because “it’s a great deal”. Sure, you might be able to get a particular piece of real estate for less than it is worth, but does that make sense for you? Does it offer specific value to your investing plan? Is it logical? Buying for the sake of buying is a trap that you need to avoid, as it just ties up your capital, possibly without a corresponding return on your investment.

You Have a Cushion

Never invest in any real estate if you’re not going to have a cushion left over. If the purchase of one property will leave you without liquid capital, forcing you to rely on the income generated by other properties for your living expenses, it might be wiser to hold off.

Use Leverage Wisely

The ability to purchase real estate with debt (or leverage) is a powerful incentive to get into the game, but it can be a two-edged sword. Leverage can be a valuable tool, but you need to ensure that you’re using it correctly. If not, do not use it at all.

Growing your real estate portfolio doesn’t need to be complicated, or fraught with pitfalls. Follow these simple tips and maximize your growth while safeguarding yourself from potential problems.

No Comments

Real Estate Investors Pay Close Attention: 9 Crucial Considerations You Need to Make (2019 Update)

Have you already gotten into real estate investing? If so, it’s time to refocus on your goals, clarify your vision and double down on planning for the future. Whether you own one property or many, the following considerations are absolutely crucial and should be taken into account immediately.

1. Where Do You Stand?

One of the most important things you need to do, and perhaps the first step to consider, is evaluating where you stand right now. What do your numbers say? Chances are good that no major changes have slipped past your notice, but it’s likely that there have been small changes that may have gone unnoticed, and those can add up to major problems if you don’t spot them now. Where can you cut costs? Where can you make better decisions with your money?

2. What’s Changed?

Change is a constant in the real estate industry, whether it moves quickly or slowly. It’s important to take stock of your area and see what has changed. What neighborhoods are hot now? Which are less so? How have these changes affected your investments? How will those changes affect your plans moving forward, and how can you take advantage of those trends to ensure that you benefit from them?

3. Clarify Your Targets

It’s impossible to move forward with your investing efforts if you lack clear, defined targets. You also need clearly described tasks or steps that lead you from target to target. Your goals should be measurable and attainable, and you should be able to track your progress toward those goals through individual, manageable milestones. Ideally, smaller goals should dovetail with larger ones, creating a path toward success for the long term.

4. Plan for Adjustments to Improve Performance

If you own multiple rental properties, you know just how costly maintenance, and even just utility bills can be. There are many ways that you can offset those costs by planning for adjustments now. For instance, does one of your properties have an outdated HVAC system? Perhaps it uses lots of water, or maybe the appliances are old and not energy efficient. These are all examples of where you can spend a little bit of money now and reap the benefits for a long time afterward. Adjustments now save you time, money and headaches down the road, but can also foster savings.

5. Cut the Deadwood

Every investor will encounter this at some point – something’s just not working the way it was supposed to. Take stock of your situation now. Identify what isn’t working and then determine why it isn’t working. Based on that analysis, you can determine whether it’s something that can be fixed, or if you need to cut the deadwood and move on. You can bring this to bear on pretty much everything in your process – identify elements that can be streamlined or changed to make everything as efficient as possible. Whether you’re considering changing property management firms, or dumping a particular investment property that consistently underperforms, now is the time to make those adjustments.

6. What Went Right?

There’s a lot of focus on what goes wrong with your process, but you also need to identify what went right. Whether you paid less for maintenance, or one of your properties performed very well, it’s a cause to celebrate.

7. Winterize/Summer-Proof

Winter and summer are particularly challenging for property owners and investors. Get ahead of the game by winterizing or summer-proofing your properties before extreme weather hits.

8. What’s Changing?

Ready to make some upgrades to your properties? Is it finally time for that long awaited renovation? Plan those now. Determine how you’ll pull them off, when they’ll be accomplished and then get the ball rolling.

9. Learn

Chances are good that you’ve made a couple of missteps in the last few months. It’s important to see those for what they are – lessons to be learned. Learn from them, and then move on.

With these considerations, you can move forward confidently, manage your properties and reap the rewards of your savvy investments.

No Comments

Different Ways to Maximize Investing Efforts While Working a Full-Time Job (2019 Update)

You may have reading about real estate investing and dreaming of rolling up your sleeves and getting started on all of those hot properties in the Plano or North Dallas areas. After all, you read that Dallas and surrounding areas like University Park, Southlake and Frisco are all considered some of the best investments for 2017.

Then, just as soon as visions of burgeoning wealth appear, the dream fades and your reality comes crowding in…the full-time job with its commute, the household responsibilities, and maybe even the pressures of family life. Just where, you ask yourself, will I get the time to do any of the work needed to be a success at real estate investing?

Fortunately, we have nine ways you can actually optimize even the smallest investment efforts and all while keeping your proverbial day job.

Use the commute

Most of us drive for a short or even very long period of time as we make our way to work. If you are a commuter on a bus or train, that time can still count towards your shift from full-time worker to liberated real estate investor. How? Simple – use that time to begin learning by listening. Sign up for podcasts, buy books on tape and start using every moment of typical “down time” or frustrating commuting into a beneficial and empowering experience.

Use technology

With the many different technologies that you can access from a phone or mobile device, there is no reason that you cannot easily conduct business during breaks, or throughout the day. Whether it is through the use of VoIP services, mass emailing services, real estate apps, and website technologies, you can put technology to use and still keep up to pace with the 9-5.

VAs

If you already have the wheels turning on your business, it can be amazingly empowering to have a VA or virtual assistant. Often costing substantially less than a traditional assistant, a VA can do everything from real-time phone calls, project management, screening sellers or buyers and more. You can even customize training for them and assign them a diversity of very specialized tasks from website management to social media work.

Marketing

Modern tech makes it easier than ever to get marketing and advertising up and running in a matter of moments. However, real estate investors often have the need for physical advertising, such as direct mailings. You don’t have the time to stuff hundreds of envelopes, but online resources can do it for you. They can create postcards, mailers and more, and even arrange for physical delivery of marketing materials to targeted recipients.

Skip breaks and lunches

If you really want to commit to success, forgo your daily lunch and coffee breaks and use them as time in the “field”. Book anything from showings or visits with sellers to other professional appointments. Few will require more than twenty to thirty minutes, and then you can be back at the grindstone!

Professionals

Outsourcing small tasks to freelance professionals is a major time-saver and allows you to get tasks done at a very affordable cost. For example, a bookkeeper can do everything you need in order to keep things on target, and all you have to do is request a report in order to see expenses, income, taxes and more.

Managers

In line with professionals, you will also want to consider a relationship with property management experts. Whether you are electing to invest in commercial or residential real estate in North Dallas or Plano, you can often find a way to afford the services of a property manager. They can even make your work “hands-free”, allowing you to pursue additional investments.

Teams

If you can, you may want to consider partnering with other real estate investors. They can even compensate for the experience you may not have (and vice versa). The two of you can divide the work, grow your investments and shorten the time until you go from full-time worker to full-time investor.

Contractors

Lastly, contractors and repair experts are a must-have relationship. If you want to maximize your investments, begin them with a team of experts already lined up.

Time, money and energy are not limitless, but you need them to be a success. These tips can help you make the very most of your investing efforts.

No Comments

How Should You Make Money through Residential Real Estate (2019 Update)

When you hear the words “real estate investing”, you most likely automatically think about buying multi-family housing units, or perhaps office or retail space. While those are tried and true investment options that work for many people, there’s also the possibility to make money in residential real estate, as well. These options range from the conventional rental situation to other choices, and we’ll explain some of the most frequently used methods below.

Choose Your Method

There are quite a few options for making money in residential real estate, but two of the most common are flipping and renting. In one, you will buy a home, fix it up and upgrade it, and then sell it for more than you paid. In the other, you’ll buy a home, make any needed repairs or upgrades, and then rent it out while maintaining ownership. Both are viable options, but for an increasing number of real estate investors, the headaches involved with being a landlord mean that going the flipping route is a better choice. Only you can make this call, though.

There are other choices, as well. For instance, if you’re able to buy a home for a low enough price, you may not need to rehab it at all. Foreclosures are good examples of this sort of purchase. You might be able to increase the equity in the home and build your investment that way, or you could use leverage to increase your return.

Choosing Your Area

The next consideration is where you’ll be buying homes. For the sake of simplicity, the rest of this article will be focused on flipping homes. You will need to decide what nation you want to purchase your properties in – international residential real estate is a very good way to improve your financial outlook, although you’ll definitely need capital to get started.

Look for a solid, upward trending national economy. In a growing economy, real estate prices will rise, but if a recession were to hit, you can expect residential real estate prices to fall as sellers scramble to entice the few remaining buyers to their properties. You’ll also want to consider other elements, such as the gross domestic product of the nation (GDP), as this has a great impact on everything from the health of the real estate market to the average annual salary of that nation’s citizens.

Areas in the Nation

Once you’ve chosen the right nation, you’ll need to consider the local areas (cities) in which you want to buy properties. You definitely want a city with high growth (or even growth potential), and that means jobs, plus considering environmental factors. Finding local employment data for international locations can be problematic, but more industrialized nations often publish these statistics through a government agency (for the US, it would be the Bureau of Labor Statistics, for instance).

It’s not enough to just research a city and make a decision based on printed statistics. You need actual knowledge of the area. It’s ideal if you can live in the area for some time so you can get to know it firsthand. Failing this, you’ll need to work with management partners that help you make an informed decision.

Next up, you need to choose the area of the city in which to invest. This will depend on a several factors. City growth is definitely one of those, but so is risk tolerance. For instance, if a city is growing rapidly, it might be a wise decision to buy in the outlying suburbs to take advantage of the soon-to-be run for the hills by would-be suburbanites. However, there’s a lot of risk in that – what happens if growth slows and the migration from the city center doesn’t materialize? Your own risk tolerance will dictate where you buy.

There are many different options when it comes to making money in residential real estate, but there’s no one size fits all solution. Define your goals, how you’ll reach them, and know your risk tolerance. Build a plan based on that information.