Tips and Advice On How To Get Started In Real Estate Investing

Assessing Value In Potential Investment Properties

Ill tell you. Getting started in real estate investing can be scary, very scary. It has been one of the scariest things I have encountered. It was hard for me to step out of my comfort zone to make something happen. That is key. You have to step out of your comfort zone and do it. Don’t worry about the bad things that might happen. I had to think about the positive things that would happen. More money. More money makes life easier. It was always something that I worried about, making sure I had enough money to take care of my family.

If you can think more about the positive than the negative, it makes the transition to being a real estate investor easier. After a few deals it becomes normal and you start kicking yourself that you didn’t jump out and do it sooner.

Also, preparation will help as well. Get your team of professionals together. Get your real estate expert with you, get your attorney. Once you have your support system set up, things get easier.

Look at as many financial situations as you can. Think about problems that might occur when buying investment property. Be extremely conservative in your budgeting initially. All of these things can help you get starting in property investment.

Finding the property value

As a real estate investor, your ultimate goal is to make money. that’s simple. You want to learn how to buy property at the right price. You don’t want to overpay. You cannot guarantee that this won’t happen. But you can try.

Appraisals

Appraisals are keys to this. Real estate appraisals are not set in stone. They are basically an educated guess. They do give you a good idea on the true value or fair market value of your potential investment property is worth.

There are different types of appraisals. You have a comparative market analysis, reproduction cost and capitalization of income approaches.

Comparative market analysis

Comparative market analysis is probably the most well known appraisal approach. Most people just call them “comps”. basically you look at similar properties in the same area to see what their prices were at the point of sale. There are lots of factors to consider however. Factors such as the age of the property, the square footage, how long ago the property sold, and others. If you can find a property that closely resembles yours, then you have a good idea of how much you should be paying for that investment property.

I have used this approach many times. Most investors do. This is probably the preferred appraisal approach.

Reproduction cost appraisal

Which method of appraisal should I use?

Well that is up to you. All of them have their pros and their cons. Choose what you are most comfortable with. It never hurts to discuss this with your real estate investment team.

Use these appraisal methods to help you make your offer on the property. Use these methods as reasons for your offer. If you give the seller your reason as to why your offer was lower than what they want, they are less likely to be offended and will do more to consider your offer.