We all know how competitive real estate investing can be. With the housing crash and extremely low bank loan rates, most investors find real estate to be a lucrative business opportunity. But, while it is lucrative, the stiff competition can be tough on a new entrant in the business.
Adam Ginsberg, one of the foremost wealth building and internet entrepreneurship coaches spills the beans on how to get the most out of your real estate investments, even if you are a newbie.
Bean #1 - Find a Mentor
Entering a new industry without learning anything about it is akin to going in blind into a battle. You wouldn’t even know what hit you. Adam Ginsberg insists that you find a mentor who is experienced and successful in the business. Get your mentor to train you in the basics of real estate investing, like strategies onchoosing which properties to buy, how to choose the areas to invest in, financing options etc. If your mentor is an old horse in the business, there’s a lot that you could learn just from their experiences. Meet with your mentor on a regular basis and share your own views and investment strategies to see if you are on the right track.
Bean #2 – Always check under the hood
Real estate investing has a basic 3-step approach. Buy property, fix property, and sell property. Easy as it may sound, it’s far from that. If you get the first step wrong, you can say goodbye to any profits that you were hoping to make on the investment. Adam strongly recommends a detailed inspection of the property that you intend to invest in. It’s only after an inspection that you can figure out how much money you’ll end up spending in fixing the place up. And, if there’s some serious damage, like in the foundation or in the electrical and plumbing setup, you should steer clear of the property because it is going to cost a lot to fix and that your profits are going to be very low, unless of course you are getting the property really cheap and you think you can still extract a decent profit even after hefty repairs.
Bean # 3 - Savings are Profit too
Once you’ve got a property inspected and you believe that you can sell it for a decent profit after fixing it up, the next step is to figure out who will renovate it for you. If you go to the market and hire a professional contractor, they will charge you the prevailing rates for the job. The trick here, as revealed by Adam Ginsberg is to minimize your spending to maximize your profit. One way to do that is to take on the renovation contract yourself and then subcontract the individual jobs to the related professionals. Another way to save on renovation costs would be to find a contractor in your circle of friends and family, who would be willing to offer you better rates than those whom you don’t know. Whatever approach you take, always ensure that you do not compromise on the quality of the renovation, because if your property does not pass inspection, you will not be able to sell it.