Your first step towards a successful real estate investment career in Fargo ND is to know the lay of the land. What challenges are you going to face? How will you overcome them? You should try to find out the answers to these questions before setting off on your real estate investment journey. Don’t let the fact that there will be obstacles on your path paralyze you. You should also not make decisions in a hurry. Familiarizing yourself with the real estate investment process is the best way to be prepared to deal with these obstacles when they rear their ugly head.
Here is the step-by-step real estate investment process that you can follow:
Step#1: Determining your real estate investment goals
Is real estate investment just a tool to supplement your full time income? Are you in it for building serious wealth? You should at least have a basic idea of your aspirations and expectations before launching your real estate investment career. We are not saying that you can’t elevate your goals after you have closed a couple of deals successfully, but knowing your expectations will help you decide how much time and money you need to invest in order to achieve your financial goals.
Step#2: Decide property type
You can invest in a single family home, a condo, an apartment building or a commercial property. You should know that there are pros and cons associated with each of these property types. For example an apartment building will provide a higher cash flow, but it can be a riskier investment compared to a single family home or condo.
Step#3: Decide your investment and exit strategy
It is very important to determine what your exit strategy is going to be. You can buy properties below market value, fix them and then resell for a profit. It is called a ‘fix and flip’ investment strategy.
If you are wholesaling, you don’t need to even buy the property. You can simply put it under contract and sell it to another investor. In a ‘buy-and-hold’ investment strategy, you purchase the property, fix it (if required) and rent it out.
Try to find out which of these exit strategies suits you the most depending on your current financial situation, investment goals and availability of time.
Step#4: Study the trends
Successful real estate investors keep a hawk eye on the current condition and future prospects of the real estate market they are planning to invest in. They keep details such as average number of days on the market, median home price, rate of appreciation in property values, rate of population growth, economic development and existing inventory at their fingertips. You should also educate yourself about your target market as much as possible before taking the plunge.
Step#5: Build your network
This is probably the most important step in real estate investing. You should network with real estate agents, investors, contractors, skilled workers, appraisers, real estate lawyers, title inspectors and other professionals that provide allied real estate services in your area. They can not only tip you off about great deals, but also be by your side whenever you need guidance and help.