Real estate strategies beginners should focus on

Home » Republican » Real estate strategies beginners should focus on

There are infinite reasons why anyone should start investing in real estate, such as leverage, capital gains and tax-deferred exchanges. At first, many consider learning everything there is about real estate investing to be the most important aspect. However, they couldn’t be more wrong. In reality, it is important to focus on the investing vehicle and the strategy for using that vehicle. The following list includes examples of strategies that make real estate investing for beginners a lot easier.

Find a mentor and choose a niche

As a real estate investor, you are most likely to deal with common property types. Each of them have many subsets, but it is no necessary to know them all. The most basic property is raw land that you can easily improve to add value and either lease or rent it. Once you do this, the cash keeps on flowing. However, the most common investment type is the single family home. They are easy to rent and easy to sell. When you actually decide to start investing, you will need to be familiarized with taxes, landlord-tenant regulations and many others. Considering that there is a difference between reading these things and doing them, you should find a mentor and void making mistakes. Once you’ve found the right person, let him know you need advice.

Begin with small things

There are numerous investment opportunities. Properties like duplexes serve as good investments due to the fact that there is less competition and that you can qualify for a loan easier. Small apartments offer a generous income, but they are more difficult to finance and there are more management-intense in nature. This being said, it is better to start off with something small, like a single family home. While you are not likely to make as much on the rental and the sale of the house than you would if you had a 20-unit apartment building, it is a perfect place to start learning.

Consider notes

The truth is that you can invest in paper mortgages. More precisely, investing in notes implies buying and selling paper mortgages. The note of the contract explains the terms. For instance, when the owner of the apartment sells a property he can offer to carry the full note, which means that the new buyer can avoid using a bank loan. The consequence is that the new buyer makes payments to pay the price. Instead, he can sell the mortgage to a note buyer. Like other types of investments, the notes are sold on for a discount and the note buyer begins collecting monthly payments.