Investing in real estate has created wealth for many entrepreneurs. Real estate is one of the few assets that typically appreciate in value over time. Real estate investors usually search for real estate properties priced below market value and sell or rent them for a profit. Starting a real estate investment business requires detailed planning. Buying real estate properties contains risks, and making sound decisions to minimize the chance of losing money is important. Real estate investing requires following contractual laws and going through the proper channels to buy and sell property legitimately.
Choose a real estate niche for your business. The option you choose depends on your interests and budget. Common types of real estate investments include investing in foreclosures, real estate owned (REO) properties, rehabs, rental properties, commercial real estate and purchasing properties wholesale.
Contact an attorney specializing in real estate. There are many laws regarding investing in real estate, and some are complex. A real estate attorney will help you understand your legal rights and requirements. An attorney will also help you choose the best business structure and draft real estate contracts to protect your interests.
Research the real estate market in the area you plan to purchase real estate investment properties. You should research market prices, neighborhood demographics, foreclosures and rental rates. Compare properties you are interested in with similar recently sold properties in the neighborhood to see if the investment will yield a profit.
Raise money for your real estate investments. Few people have enough cash on hand to buy real estate properties and must seek financing from external sources. Real estate investing can be risky, and few traditional banks approve loans for investors. Some financing options for your business may include obtaining hard-money loans and bringing in private investors.
Contact a real estate agent. This person has access to properties for sale that are not accessible to the general public. A good real estate agent can find you great potential investments and owners seeking to buy your properties.
Hire a management team and staff to oversee your properties. This is especially important if your have rental properties. The management team can act as landlords for your properties by collecting rent every month, handling eviction notices and dealing directly with the tenants. You will also need a maintenance person to handle any maintenance problems.
Set up a template for checking if properties meet financial requirements. This will help you weed out potentially bad investments.
Follow the real estate laws in your area to avoid penalties, fines and loss of property. Each city has its own laws.