You’ve heard the success stories. A guy makes $50K profit in flipping a home in PG county. Another investor builds a multi-property real estate portfolio in Frederick County and is now managing it from her retirement home in Florida. The best part is that the majority of these stories are true. Whether you are looking to supplement your income or build long-term wealth, investing in real estate is a time-proven strategy.
To add to its appeal is that we happen to live in one of the best real estate markets in the nation. The prices in the DMV area are boosted by the steady growth of the high-income jobs and are somewhat insulated from the economic cyclicality by heavy dependence on the federal government. You are in the right place to become a real estate investor and the best time to start is now. How to know whether you are personally ready to embark on your real estate investing career? Here are several things to do to make sure you are ready and one costly thing that you don’t have to.
Have money to invest
It sounds obvious, but we receive many calls each week from aspiring investors that have nothing to invest. Yes, our private hard money loans provide incredible leverage that allows you to compete with all-cash buyers. In other words, they are leveling the playing field by allowing you to buy an asset that you otherwise wouldn’t be able to afford. However, you need to have some money saved to cover the closing costs and put some skin in the game. Read more here why zero money down hard money loans are a pipe dream.
Own your own home
Owning your own residence is not our underwriting requirement so technically not being a homeowner should not preclude you from being an investor. However, I am hard pressed to think about the reasons why anyone would want to invest in real estate without first owning their own home. Typically, the folks who don’t own homes fall into two distinct categories: those who cannot afford their own home and those who don’t want to bother with it. Neither of those categories bodes well for a successful real estate career.
Be a real estate enthusiast with at least some tangential experience
We don’t require our borrowers to have a direct rehab experience to qualify for a hard money loan. Why? Because we’ve seen plenty of first-time investors to successfully managed their first flips. However, the majority of those folks had indirect experience. What kind of experience is it? For once, it’s an experience of owning your home, going through the buying process and, yes, experiencing those joys and pains of homeownership.
Many of our borrowers are real estate agents. They might not have had flipped properties themselves, but they amassed plenty of experience helping their clients to do so. The same goes for contractors. Their names might not be on the title, but it wouldn’t be fair to discount their experience.
For those real estate enthusiasts who are not contractors and realtors, there are plenty of books and blogs (including ours) to learn from. You also can join local real investor mixers to get closer to action and get practical experience. This brings me to another subject that is equally important to your success: things that are superfluous to your success as a real estate investor. We’ve covered what you need to do in the blog. Our next blog will save you time and money by covering what you don’t have to do to make it as a flipper.