By" Game Plan" What We Are Really Speaking Of Is A Business Plan

Category: Finance, Real Estate.

So you want to invest in real estate, but just don t know where to start.

Which ever is the case, now you ve decided that it doesn t look all that hard and you want to take the plunge. You ve either watched all of the television house rehabbing shows, seen the countless late night advertisements promising huge profits from real estate, know someone who is investing in real estate or all of the above. Well, it can be easy and profitable IF you know what to do and do it right. What you must understand first and foremost is that investing in real estate should not be considered a hobby, but a business. Most of the professional real estate investors have fallen flat on their face a time or two and have learned from their mistakes. If you do not treat investing in real estate with the same respect as any other business chances are you are going to be sadly disappointed.

You re not playing with monopoly money. You are going to be risking money( and possibly a lot of it) , and the money you will be risking is REAL! Once you have come to grips with the aspect of treating real estate investing as a business and you still want to do it you then want to consider your game plan. You must decide what your objectives are going to be and how you are going to achieve those objectives. By" game plan" what we are really speaking of is a business plan. You need to decide the types of properties in which you are going to focus( foreclosures, short- sales, etc, bank owned. ), where they are going to be located and in what price range.

Are you going to get a loan from a bank and if so what type? In addition, how are you going to finance the projects that you are considering? Are you going to use the equity in your home to fund the projects? These questions are vital for firming up your business plan, which will be the blueprint for your business. Are you going to seek investors or a partner or are you going to use cash? Next, you ll need to develop relationships with professionals in your area such as realtors, suppliers, contractors, attorneys, banks or other moneylenders, and accountants, mortgage companies( just to name a few) . If you choose to try and replace all of their expertise with yours you are not being realistic and not taking your new venture seriously.

These professionals will be your" external" team and will be crucial to your success. Again, treat it like a business! This professional will be able to give you comparables of homes in the areas where you wish to invest, they will be able to give you advice on the purchase price, on the sale price once all of the improvements are made, and they will also be able to advise you on where your rehab dollars are going to be best spent. The most important external team member will more than like be your realtor. They will be able to ensure that your property is a" notch above" other investors selling similar properties in the area. Your realtor can also inform you as to the quality of the materials that will be needed in order to out- rehab the competition and make your property more attractive than theirs.

For instance, usually the biggest bang for you buck in rehabbing is to replace all old mechanicals( furnace, and water heater, central air) ; the kitchen( replacing outdated counters, flooring, cabinets, and appliances) ; and the bathrooms( replacing old toilet, cabinets, tubs and showers, and flooring) . Investing in real estate can be very exciting and very profitable. Don t try to be superman or wonder woman by trying to do it all on your own. Treating it like a business and surrounding yourself with great professionals can only increase your chances for success. Most of these" external" team members are FREE and will be excited about the prospect of working with you, so use them to your advantage!

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