Council Post: 10 Fundamentals Beginning Real Estate Investors Should Know
Starting as a real estate investor can be a daunting task. Markets are usually already established—and trying to break into an established field takes time and effort. Many times, newcomers aren’t aware of everything that’s going on, which can leave them scrambling to find out themselves or to recover from a surprise.
1. The Cup Is Always Half Full
New real estate investors are very nervous on the first deal and start to panic at every obstacle. These emotions are natural considering most are spending their life savings on an investment property. Never let your emotions get too high or too low because both can cost you time and money. Remember you always find what you’re looking for if you look hard enough. – Donald Bake, New Western Acquisitions
2. The Value Is In The Experience
Your first flip isn’t all about the profits. Many first-time investors won’t make a killing off of their first property, so it’s key to keep in mind that there’s also value in the time spent managing the acquisition and renovations, learning from mistakes and seeing the project through to completion. Don’t be discouraged by less-than-stellar profits on your first deal; it’s a learning curve. – Daniel Huertas, Washington Capital Partners
3. Setting Aside Working Capital Is Key
Many new investors fail when they are hit with unexpected and major expenses or income loss such as significant repairs or a major tenant vacating. To avoid this, make sure to set aside enough working capital in reserves to account for these problems so that you can carry the property through the tough times. In addition, keep your monthly payments reasonable and don’t over-leverage a property. – Catherine Kuo, Elite Homes
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