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How To Become a Successful Real Estate Investor

Late night television shows, books and even news specials highlight get rich quick real estate schemes. The reality of real estate investing is that it takes patience, practice and thorough research. Additionally, it requires significant financial resources. Real estate investments are, however, diverse holdings that offer excellent additions to investment portfolios.

The following highlights several tips to help people become successful real estate investors.

  • Learn – Understanding the real estate market is an essential component to success. Just because an investor understands one market, doesn’t mean markets are the same in other areas. It’s important for real estate investors to thoroughly analyze their goals and finances, which helps determine the appropriate levels of risk. Generally, there are two types of real estate interests. Leasehold interests give tenants rights in exchange for landlords receiving rent payments, while ownership interest involves taking control of the land and responsibility for the property.
  • Risk – Private real estate gives investors the opportunity to exercise direct ownership interest in properties. In contrast, public real estate allows investors to purchase shares from investment trusts. In turn, the investors are paid dividends that are based on rent payments.
  • Debt and Equity – Hard money loans are given to property investors, which are therefore in debt to said investors in the form of mortgage payments. Equity investments combine operation and ownership, meaning that investors have responsibility for the property investment.
  • Investment Sector – Public equity involves investment trusts, including mortgage securities. Private equity includes purchasing residential or commercial properties wherein the investor also acts as the landlord.
  • Trading – Also known as flipping, these real estate investors focus on purchasing properties and quickly reselling them for profits. Often times, these investors only hold onto properties for weeks or months, avoiding time-consuming improvements.
  • Finances – As with any investment portfolio, investors should be well rounded. Real estate is nothing more than an additional portfolio investment that compliments stocks and bonds, ultimately adding stability to incomes.
  • Evaluate – Purchasing real estate is an expensive endeavor and investors should thoroughly analyze assets and risks.
  • Risks – Buying real estate is not without risk. While properties are on the market or if properties go unrented, it’s money out of investors’ pockets.
  • Plan – Achieving the status of a successful real estate investor requires planning. Real estate investors must rely on the knowledge of others, including money managers, real estate agents, property managers, real estate lawyers, insurance brokers, home inspectors and mortgage brokers.

 

My Hard Money Lenders understands the risks associated with real estate investing. They offer a comprehensive listing of hard money lenders throughout the U.S., including those that focus on apartment building loans, bridge loans and commercial building loans.

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