By Glenn Mananeng
Real estate investing is a great way to build wealth. This is an opportunity to invest your savings while working, studying or just enjoying life with family and friends as a passive investor and spending minimal or spending more time on projects as an active investor. This surely is a big decision; therefore, you need all the pros and cons from experienced individuals in the real estate industry.
New investors often find themselves lacking in time or resources to commit 100% in the business, leading them to ponder if it’s possible to do it part time. But is it possible though? Short answer, of course it is! Allow us here at Unique Wealth Education to show you the pros and cons of real estate investing.
Supplementary income – If you have another job on the side, you basically have two sources of income. This gives part time investors the advantage of having steady cash coming in while your real estate investment is generating cash flow or appreciation.
Fallback career – Part time investing lets you test out the waters. As good as it may seem, no industry is perfect and some have more risks involved compared to others, especially if you don’t have a mentor guiding you. Your investment properties will generate the income by itself and you can continue your current job. A win-win situation if you ask us!
Brand new network – Since you’re doing this part time, you probably have someone working with you. This gives you the opportunity to meet up with clients and fellow investors who can share valuable experiences. You might even pick up life lessons that will help you in other aspects along the way.
Flexibility – If you decide to have your investment driven by a reputable property management company with a reputable track record, you can go on your with your daily routine and agree on a convenient time to address any questions/issues. This is the case with many investors and it works out great.
Time-consuming – If you are a landlord, handling two jobs isn’t easy, especially if you decide to oversee your investments, such a rental homes (depending on the # of properties/units) without the expertise of a property management company. Dealing with the issues of getting a qualified tenant, maintenance issues that arise, and bottom line keeping your property rented continuously is a job.
Avoiding bad deals – If you are flipping, it is crucially important to be able to locate and asses properties in the right location, that has either a high rental demand or saleability. This is something that you can learn by being around experts that can help you assess the property by using current and future projected market data, a proforma and specific strategies. You will lose a lot of money if you buy in the wrong location and use the wrong (highest or wrong comparables) comps.
Not having a reliable construction contractor that can give you an accurate bid for the renovations prior to the purchase, can really hurt you if your budget is off. This is why investors (wholesaler or fix and flipper) should learn how to roughly budget the cost of renovations, as you never want to have the fate of my investment put into 1 contractors hands.
Lastly, weather your renting or flipping, have the right finishes. Take great pictures (before and after) when the project is completed, try to time the listing between school years which is the hottest selling and rental season.
By now, you probably realized that doing this part time or not, you need guidance from experienced real estate investors. Real estate investing can demand a lot of work part time or full time and this is particularly true when you have multiple properties already. Here are a few tips to do it effectively:
Find the right niche
You’re going to have to look into a strategy that has a more hands-free approach. It can get hard to choose from a vast array of real estate strategies out there. You only have a limited amount of time to commit therefore try looking into one what works for you and stick to it. The more you familiarize and master that particular niche, you’d be surprised how much less time you’re able to spend to produce results.
Focusing on lead generation can score you with the best deal in the real estate industry. Setting at least an hour or two a day (preferably at least 20 hours a week) marketing your business to generate leads can be a good start. Just a reminder, you have to understand that not all goods leads convert into successful deals prompting you to work even harder. You can ask around for suggestions to an effective lead generation program that can help you have a source of qualified leads and help yourself to a lot of data that meets your business criteria.
Expand your network
You need to have a network of professionals in real estate. Investing in this industry is a “people” business. You need to work with different types of people such as buyers, sellers, loan officer, mortgage brokers, appraisers, and the list goes on. Each person can provide a link for you to build a strong network.
Find a reputable mentor
Even the best investors were under the tutelage of a mentor. Joining a real estate team or finding a partner who does investments full time can provide insight and many benefits. These professionals are experienced, they know amazing deals. Factors like the right time to buy or sell, managing any risks that may come along the way, and increasing your chances to close the deal is a daily routine for them.
Unique Wealth Education has a broad network of individuals who share the same passion in the real estate business. To help you expand your knowledge about the industry and be involved with professionals who are already active in the business, we invite you to our monthly meetup every first Thursday of each month. To learn more, call (734) 224-5454 or email us at firstname.lastname@example.org