Real Estate Investing Best Practices
If you like the idea of investing in real estate but aren’t quite sure how to begin. Good news, you’re in the right place. A new investor understands the value of acquiring investment properties and the vast benefits associated with the real estate business and they may even understand the enormous tax advantages that ownership in real estate properties can bring, but they don’t know how to get started.
A lot of successful investors started by flipping houses or acquiring a few short-term rentals to build up their capital. Then they invested in larger real estate deals such as commercial properties to gain passive income as they became more savvy investors.
Here at PCRP Group, we know many investors who started their endeavor in real estate investing by buying short-term or vacation rental properties. This is a great way to build capital through rental income as you get started. The additional perk of this investment strategy is that you can enjoy these residential properties with family and friends while you’re earning cash flow and acquiring your real estate experience.
Is Financial Independence The Goal?
If having financial independence is important to you, you will want to eventually move from having an active investor role such as being a property manager in short-term rentals to more passive investment approaches so that you can be receiving cash flow distributions. By considering various investment options such as a commercial real estate syndication, you can invest in institutional-grade assets such as apartment buildings without having to do any day-to-day management.
The best part about real estate investing is that there are so many ways to invest that can help you reach your financial goals. It’s just a matter of understanding which approach is the best fit for you.
Here is a quick overview of how to get started successfully in real estate investing.
Identify Your Strengths
The best way to start is to identify what your strengths are. While this may sound somewhat cliche, it will help you to understand what you should spend more of your time on given your strengths and what you should source out to others. This will give you a big picture of your current situation and help you to get started with the right foundation. This is what the most successful real estate investors do at the outset of their journey.
As a real estate investor, it’s vital to identify your strengths. So, for example, if you know you’re good at locating properties that have potential and you can develop a renovation strategy that allows you to capitalize on better returns when the property is sold, then you should focus on that aspect of the acquisition. On the other hand, if you know execution is not your strongest skill, then you should outsource that to someone on your team who can fill that role and oversee the business plan of the project.
Identifying your own strengths is essential, but it’s equally important to understand the strengths others can bring to the table as well. As you are building your team, everyone will possess different strengths and backgrounds, so as a smart investor you can learn to leverage everyone’s expertise to create a team that will generate the best synergy.
Design A Plan
Once you have identified individual talents and strengths then it’s time to develop a plan of action to help you realize your real estate investment goals.
Most of us have aspirations and dreams that we want to accomplish, and real estate investing can help you achieve those dreams.
When creating your plan, one of the most important things you can do to start is to conduct your due diligence. By that, I mean you want to understand what is happening in the real estate markets you wish to invest in, which asset classes you will be investing in, and why and what types of returns you want and the timeline you wish to have those returns. All of these decisions will hinge on what your financial goals are and when you want to achieve them.
Here’s a pro tip, don’t just research the best cities or towns that you want to invest in but also research real estate market cycles. This approach may help you to understand what to look for in various economic cycles that can improve your decision making throughout the process.
Once you’ve laid the groundwork, it’s time to get busy and take action.
While this is an obvious next step, many people get caught up in the initial steps of due diligence and market research and then find themselves not knowing exactly what to do next.
A good idea is to set a timeline for yourself on the completion of tasks that you will need to do next. You will want to first map out your research phase as part of your due diligence. Once you have determined what needs to be done for this phase, then you can create an actionable plan and the timelines that will help you stay on track. To do this you will want to set dates and deadlines.
When you are figuring out how much time to allow for the various tasks, be sure to create deadlines that are realistic and attainable but that will also challenge you to get as much done as you can. Giving yourself too much time to achieve your timeline can often leave you with tasks that aren’t completed in the long run, so set goals that you know you can realistically work toward.
The more action you can take today will ensure you reach your goals in the long term. So, taking action is the key to helping you realize your dreams.
Propel Yourself Forward
Real estate investing can be intimidating for some, and especially for new investors, but it’s important to remember that done is sometimes better than perfect. The right time is now if you want to have the future you envision for yourself and your family.
In order to move forward, you must learn to trust yourself and trust your instincts. As you become more experienced, you will begin to feel more and more comfortable in being a real estate investor, but until then, identify your strengths and the strengths of your team, create a plan with actionable deadlines and then take action.
Remember, the first property you invest in will be the stepping stone to helping you gain the confidence you need to learn more and to do more. You will learn from every investment property you invest in, and that’s the goal. Then, as your knowledge expands, you will be wiser and more educated to make even better decisions as you progress through your real estate investing journey.
By taking these small actions that accumulate over time you can create an investment portfolio that will ultimately help you to enjoy your life and help you to realize your dreams while you’re building your wealth.
Note: we are not financial advisors and are not offering financial advice of any kind. Please consult with your advisors before making any investment or financial decisions.
Ready to Learn More?
The best way for you to learn more about commercial real estate syndications is to join the PCRP Passive Investor Club.
Through the PCRP Passive Investor Club, you’ll get a priority review of all the deals we offer. We’ll work with you to determine your investing goals and then present you with the best deals to meet those goals. We’ll then guide you every step of the way as you invest in those deals.
So if you’re ready to start investing passively in institutional-grade, commercial real estate in fast-growing, climate-resilient markets in the U.S., join the PCRP Passive Investor Club – IT’S FREE! – and get started on your path to EARN PASSIVELY and LIVE ABUNDANTLY!
If you would like to know more about what we do and how it may be of value to you, please reach out to us anytime. We’re always happy to help!