Getting started with real estate investment might seem daunting. However, with the right information and planning, almost anyone can build a profitable real estate portfolio. In our latest post, we offer tips and tricks for new real estate investors in Detroit!
Everyone has to start somewhere in the world of real estate investment. With only a few thousand dollars, people all over the world have built real estate empires. The key to being successful is to never stop learning. By being a well-informed investor, you can put yourself ahead of the other would-be investors who aren’t taking the time to properly educate themselves. No two markets are the same, and real estate can vary within just a few blocks! Take a look at your prospective neighborhood and your goals for the future. Start with the end in mind then work on the steps to help get you there.
Start With What You Have
Do you own your house? This is the best way to learn real estate basics. You need to live somewhere, and building equity in your home will serve you as you begin to build your portfolio. By purchasing the home you live in, you can take advantage of a low down payment using an FHA loan. Better yet, if you can save the 20% required for a conventional loan, that will help you save money in the long run. In a couple years, you will have the option to rent the house out, collecting rent, while still building equity.
In addition to saving up for a downpayment, there are many additional expenses a new homeowner will face. Unless you are purchasing from a direct seller such as We Buy Houses in Detroit, you will likely be dealing with closing costs and commissions right from the get-go. There will be things you want to fix and repair in addition to miscellaneous costs such as utility deposits and HOA fees. You might find yourself with more expenses than you planned for. By saving up ahead of time, you won’t have to stress yourself out when buying a home in Detroit.
Network Like Crazy
Talk to as many people as possible about your desire to purchase a Detroit property. You will be surprised at who knows who and what doors this can open. Many times, the best deals are found via word of mouth. By making it known that you are ready to buy, you might find the deals start coming to you.
Set reasonable goals and expectations of yourself and of your properties. Study what has sold recently in your market and what rental properties are going for. Look at the numbers over time to spot trends in your area. Take caution with the sellers you work with. If a property seems too good to be true, fully research it before making any moves. Don’t get lost in the hype and find yourself stuck at the losing end of a bad deal. Make sure your expectations are reasonable. Sure, some people strike it rich, but you can’t expect to fund your retirement overnight.
This Is Business
Often times, new investors will allow emotion to come into play when buying and selling homes. This can ultimately cost you big time. You need to know when to put more money into a property, when to make a big purchase, and when to walk away. Your investments should be treated just as you would treat a job. Hopefully, you have a strong work ethic!
Ask For Help
The best investors have strong teams around them, They know the best agents, wholesalers and title professionals in town. You should know when to go it alone and when to bring in a property manager. A good one is worth their weight in gold!
If you want to learn more about the market and local investment opportunities, network with other investors and investment companies. Truly great investors take pride in their knowledge and enjoy sharing what they know. Even the most experienced investor should never stop learning.
Leave No Stone Unturned
Look for properties everywhere. Great deals can be found on the market, off the market, through networking and even by driving neighborhoods. You can write anyone a letter, inquiring if they would consider selling to you. If you choose to be direct about your interest in buying someone’s home, never come across pushy or overbearing. Sometimes it is best to work with a team who can find the deals for you!