Investing in real estate can be very rewarding, but flipping houses for the newbie real estate investor can also be full of unexpected surprises.
As a newbie real estate investor, you have most likely read all the information on your local real estate market and are ready to throw your hat into the ring and begin your own real estate portfolio, though there are many wrong ways in which an investor can go about the process.
Flipping properties is my field of expertise and a good deal of what will be discussed here will relate to flipping properties though some of the information can be crossed over into rental properties and other types of real estate investment. Even personal property can be a real estate investment. Real estate is one of the few forms of investment in today’s society in which you can actually see the changes as they are occurring.
“The key is in sticking to a plan the entire time and never throwing the plan out the window and flying by the seat of your pants.”
It is truly amazing to watch a property that was once neglected and in a state of disrepair suddenly spark back to life right before your very eyes. There is a lot of work involved in this process though and this is often overlooked. Much like labor in light of birth. The pains are quickly forgotten when looking into the face of the outcome.
As a newbie real estate investor, you will need to keep these things in mind for your first time and you should be well on your way to future success. You should also realize that the first few investments are learning experiences more than anything else. If you do not achieve the success you were hoping for (or success to a lesser degree than hoped) you should not give up on the dream altogether, simply learn from the mistakes you will make along the way as well as the mistakes that others have made.
Real estate investing is not an exact science. There is no formula in this business that guarantees success. Even seasoned professionals will find the occasional bump in the road even on a property for which they had high expectations.
Stuff can happen along the way that cost money, delay the project, or set the project back. These things are stumbling blocks no doubt but should not be allowed to derail the entire project. When these things happen, go back to your original plan, reassess the situation and create a new plan with the necessary adjustments in mind. The key is in sticking to a plan the entire time and never throwing the plan out the window and flying by the seat of your pants.
Your plan will be your lifeline throughout the project. You need to have a plan and a budget in writing. One great rule of thumb is that you set aside double the amount of money you plan for in your budget. This gives you a bit of a safety net for the inevitable things that will go wrong.
Things will go wrong on almost every flip you encounter. Even the seasoned professionals that have television shows about their flipping efforts encounter problems in almost every single flip, rehab, or renovation.
For your first few investment purchases, I recommend that you purchase properties that need little more than minor cosmetic repair rather than complete rehabs or renovations. This allows you to get your feet wet without the incredible risk of going off the deep end mentally, emotionally, and financially.
These properties represent lower profits but also lower risk. They also allow you to gain valuable experience and raise a little capital in which to invest in properties requiring more extensive work in the future.
Keep your eye on the carrot at the end of the project. Far too many would-be property investors give up just before they reach the point of true profitability. The goal is the profit at the end of the project.
Need to develop a plan for flipping real estate? This is where an experienced real estate coach like myself can help. There is a saying I heard that applies to many things and is especially true in real estate investing, “You don’t know what you don’t know”.
If you are serious about real estate investing, whether you are a newbie real estate investor or a seasoned investor and would like to reduce your chances of losing money and increase your earnings, a real estate coach is going to see things that you may not. A real estate coach can pay for itself thousands of times over.
It doesn’t matter if you are burnt out, new to the game, a lousy rehabber, seasoned, successful or just plain curious, I encourage you to learn about the wonderful opportunities real estate investing can offer. Want to learn more about how to earn more flipping real estate? Contact me today!