Prosper Newsletter: April 2007 > Real Estate
You understand that the following information is educational in nature and is not intended to be legal, accounting, or tax advice. You are responsible for your own financial decisions and should consult your own legal, accounting, and tax advisors before making your financial decisions.
Beating the Average Returns
Investing in Real Estate is can be a better choice than most other investments. Not only is it easier to get a loan to buy property, but the returns are higher in Real Estate as well. The volatility of Real Estate is also easier to predict than in other investments, and things that might cause the property to depreciate, such as fire, earthquakes, flood, etc. are generally insurable.
A good website to find out where people most want to live is www.bestplaces.net. If the population of a certain city has decreased, it shows that most people are moving out of the area, and it would not be a good area in which to invest. It also shows if job availability is up or down, and the appreciation rate for properties in the area. Try to purchase a property that will appreciate more than an average of five percent in the length of time that you plan on owning the property.
You can also type in a search on the internet using such words as "metropolitan market real estate" or "metropolitan statistical areas". You will discover even more details there, such as how many building permits are granted and information on home sales.
Most people look for a market that they are familiar with. By doing this, it is possible to avoid buying property in the bad part of town and to have a better idea if you are buying higher than market value for something.
On the other hand, it can be a good idea to invest in property that isn't close by where you live as well. That way you may find an area that will appreciate faster than your own particular area, and the average price of homes may be lower in another area. Always try to remember that the area to go to in order to beat the average depends more on what you're going to do in that market area than just statistics.
Some areas have already appreciated so much that they have started to push the limit. In these cases, you need to be a bit more picky with where you decide to buy, but the property usually continues to appreciate, even if it is at a slower rate than usual.
Use logic when you decide to invest instead of emotion. Try to find waterfront properties that are located on a beach or lake, or properties located on high ground with a view. Properties that are also in the path of progress are a good find as well. They will be near new roads or plentiful construction, or they will be in an area with increasing population and job growth.
Beginner Purchases Four Properties in Two Months
I had absolutely no knowledge/experience in real estate investing. I was a 'newbie.' I went to the RE and Wealth Expo in Orange County in November 2006. Since taking the course and having my coach (very caring and highly skilled) as my mentor (which I highly advise doing to make things easier/more understandable), I have been able to get past my anxiety of not knowing what to do or how to get started in this business, let alone do it successfully. Although it seemed overwhelming at times, with my coach's help and guidance, I was able to stay on track and keep the information straight in my mind. There is a lot to learn. I have purchased 4 properties in Florida so far, and made several other offers in other states. I hope to make some offers in my home state of California shortly. My friends teasingly call me 'Ms. Trump.' I never thought I would ever have my own home (which I bought in 1987 and was paid off in full in 2003), let alone any real estate for investment purposes -- but I have dreamed, and now accomplished this in only a few months, and I'm just getting started. Without my mentor, I would have struggled and possibly not accomplished even this much. I hope to some day teach some of my friends who are struggling with their own finances how to join me and get their own real estate investing business started, and as a way to be able to give back to my community, continue helping others in distress that need my help. I have learned so much and accomplished more than I thought I ever could. Thanks to my coach and Prosper for your support and encouragement.
- Carol M.
Making Money While You Sleep.
How would you like to have a real estate business that made money while you weren't even thinking about real estate or your business? The way you can create this type of business is by leveraging other people's time and utilizing various marketing and advertising strategies. Most new investors are going to spend a significant part of their own time working their business. This is not a bad thing, in fact, it is critical that new investors, and seasoned investors for that matter, spend a lot of time researching potential markets, sourcing deals, evaluating properties, etc. The problem is there is a limited amount of time in each day and at times you may feel like you're running yourself ragged or spinning your wheels.
You are going to want to create a business where other people and your marketing efforts are working for you. Once you've created this environment, your business is going to be moving forward and progressing when you are out to dinner, watching television, sleeping, spending time with family and friends and when real estate is the farthest thing from your mind.
So how do you do this? Firstly, you want to have the mindset of not doing everything yourself and understand the importance of having other people help you in your finding efforts. Secondly, put other people to work. You will want to have real estate agents that understand what your buying criteria is out in the market looking for deals for you. This is their job, so it should be relatively easy to get agents working for you. Bird dogs are also another great source for helping you find deals. Bird dogs are simply people that you can have out in the market place looking for deals for you. You will compensate these individuals on the deals they bring you. Thirdly, establish a marketing plan and strategy. This can include flyers, car magnets, direct mailers, signs in heavily trafficked areas, business cards, networking and marketing yourself to other investors or potential sellers, etc.
Once you start leveraging other people's time and implement an aggressive marketing plan, your business will grow significantly faster than if you rely solely on your own efforts. There just isn't enough time in the day to do it yourself.
