An Action Plan That Can Put You in Total Control of Your Financial Future
In a previous article we discussed different types of real estate investments, including wholesales, property flips and rental units.
After reading the discussion about the differences of each method, it doesn’t take long to realize that a combination of each one makes for a comprehensive approach to real estate investing. Of course, there are tons of options out there in terms of real estate investment strategies with some being better suited to your goals and circumstances than others. However, here’s a general action plan that can put you in control of your financial future with the required determination, motivation, hard work and perseverance. Notice how we didn’t say money? That’s correct, even if you don’t have significant capital up front you can still break into the market with this plan.
Step 1: Obtain your real estate license
The first step is to start working on your real estate license so you can purchase these properties yourself. This will help to expand your market of potential opportunities. Typically, without your real estate license you will have to hire a real estate agent, which cuts into your profits. The other option is to focus only on homeowners that do not want to go through real estate agents, but these can be tricky to find.
Step 2: Enter the real estate investment market through wholesale deals
The best place to start is with wholesale deals as this requires the least amount of money down. Depending on how you structure your deals, you may be able to do this with no cash down. This is one of the less capital-intensive ways for you to break into the real estate market. Also, wholesaling has the shortest timeframe from purchase to resale since you are essentially selling the property in a similar condition as to when you originally bought it. This can help to increase your investment funds by putting your profits from each deal back into the operations.
For all the details about wholesaling, read more
Step 3: Work your way up to flipping properties
The next step on the scale is to begin flipping properties. For these types of investments, you will either need to have saved up enough cash (which is the recommended option) or take out a second mortgage. These types of deals will typically warrant larger profit margins (i.e., paydays for you), although they tend to take a little longer to complete. Specifically, the time between your original purchase and resale takes a little longer to be executed since you are essentially renovating the property. Thus, by staggering wholesale deals while these property flipping deals are being carried out, you can create a consistent flow of income.
To learn more about flipping properties, read more
Step 4: Purchase your first rental property
The final option requiring the most significant investment up front is rental units. These can be purchased once you’ve saved up enough cash from the previous two methods. Once you have enough to invest in a rental property, you will be able to count on consistent income in the form of rental income that is typically received on a monthly basis.
To learn more about rental properties, read more
Step 5: If you haven’t already, hire a team to assist with your business operations
Eventually, you’ll be at a point where you can hire property management and renovation companies to assist with your investments. Specifically, with the help of renovation companies you can then start flipping multiple properties at a time given you have the resources and financing to acquire these properties. As for rental properties, once you have purchased one of your own then you can hire a property management company to maintain and rent it out. This way, you can focus your efforts on other revenue generating activities. At this point, your investments will become quite passive in nature until it comes to buying new properties, or selling properties that are finally ready for resale.
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