I get numerous calls every week from new real estate investors, most of which just read a book or watched a DVD that they bought off a late night infomercial and the first thing they say is that they want me to help them find investment properties.
Me: Great – so what are you looking for?
Them: Investment properties.
Me: Yes, but what type of investment properties?
Them: The kind that make money…
While the conversations usually are a bit more drawn out and have all the niceties of a professional real estate broker added in there, this would be the basic gist of it. A recent case happened to me today where the investor was looking for properties to buy in the Go-Zone that qualified for SRAP. He had been talking with another agent who put on investment seminars which were basically a disguise to get people to buy properties through her, mostly in the condo market, most of which are outrageously overpriced. He had no idea that he really could not make any use of the Go-Zone credits nor did he realize the $400,000 condo she was trying to get him to purchase would have had a negative cash flow more than he made in a month because SRAP has to conform to HUD rental rates.
Know what you are looking for.
When you are going to start investing in real estate, as a new real estate investor, you should start planning your goals. Are you looking to make passive income from rentals or are you looking to just get in and out for quick money? Do you want to buy low and then hold for a few years to maximize profits or are you comfortable with a quick $10k for your efforts?
Many new investors do not have a plan of action when they start investing in real estate and they usually end up with some idiot part-time Realtor® who “does” real estate on the side once they get out of their job as someone else’s secretary. Keep in mind – NEVER take advice on investing your money from someone who is a part-timer in this business. There are too many variables that change daily and you need someone that monitors these changes and knows the market from handling hundreds of transactions.
Most people investing in real estate that fail do so because they had a bad plan of action or were working with an agent who did not know what they were doing. If you fail to plan – you plan to fail.
Know what your goals are and then come to talk to me to get started making the right decisions. Right now we are in a buyers market and the best time to buy for maximum appreciation for those wanting to sell in a few years.