Have you ever heard of the ¨wanna be´s.¨ You know the type of person that says; ¨I wanna be this,¨ or ¨I wanna be that,¨ but the person never takes the necessary steps to actually start their project, their career, or their hobby. Well real estate is no different! There are lots of ¨wanna be¨ investors. You know, the person who says he would like to get into real estate investing, but never does anything to learn about it, get into it, or invest in it. The point is, you don’t want to be a ¨wanna be!¨

If you want to invest money in real estate, then now is the time to do it! Properties of all kinds are being sold for a lot less money now than they were, even last year. So, now is the right time to buy into real estate.

How Do You Go About Investing in Real Estate?

If you are a first time buyer, it can be a daunting task. The problem with real estate investing is that you can’t just go out and buy it! You need to learn about the real estate market in your area. You need to learn about when the right time to buy is, how to negotiate, where to find the right real estate bargain, etc.

In many cases… especially with your first purchase you want to rely on the real estate expert, and you can find that expert in many forms. You can pick up a book, a video a webinar from Dean Graziosi. You can have lunch with a different real estate expert every day of the week for a month and pick their brain. You can read up on buying real estate online, or you can seek out the help of a great real estate agent. This expert advice you get from various locations means you have support and guidance from true real estate experts like Dean Graziosi. And these experts can help purchase your first real estate investment at the lowest possible price. ´

Once you have learned everything you can from your real estate investing mentor, then its time to find that great real estate bargain, but before buying it you will need the help of other real estate experts, like the home inspector, and the real estate attorney.

No matter how exciting buying that piece of property may seem, it is essential that you get it inspected. That way you will know of any repairs that need to be made and what kind of money you are looking at.

Once you have had the property inspected the next real estate expert you should consult is the real estate attorney. You want an experienced attorney to go through a mortgage contract, the papers to the sale and make sure that everything is favorable to you.

The above experts can help make your real estate investing endeavors profitable and much less scary. Just rely on the information they offer and all will be fine.

With the volumes of material written on real estate investment, rental properties, making the right buy, and selling for profit, it is easy to become a “numbers” investor.  And, there are many very successful real estate investors out there who concentrate very much on the numbers of the deal.

·         Gross Rent Multiplier

·         Capitalization Rate

·         First Year ROI

·         Subsequent Years ROI

·         Rental Yield

·         And there are more

Those and the many other calculations used by investors to value and evaluate properties are very effective and necessary.  If the numbers don’t work, the deal won’t, and losing money isn’t the goal of any investor.  We must do our “due diligence” concerning the area, prevailing prices, trends in real estate, population demographics and supply/demand related to rental properties.

However, once we’ve “run the numbers” and determined that a property is a viable candidate for purchase, we should take a “Qualitative” approach to complete our decision-making process.  The word qualitative could apply to the condition of the property, and the overall way that it will be presented in the marketplace.  But that’s not what we’re talking about here.

How does the property stack up with your desires for quality of life, your management style, your long term investment goals and the ultimate disposition of the property in your retirement or life plan?  Just because the numbers add up, you shouldn’t be convinced that this is a viable investment for your plan.

One aspect of the numbers, return on investment, can be calculated and evaluated on a time line.  A property may only be a great investment if the holding and rental income period is out ten years.  If we’re at a point in our lives where we may be retiring or making a major life-change in five years, this property may not be for us.  Liquidating it prematurely can take all of the positive return out of our pockets.

What about your tolerance for risk?  The valuation numbers for real estate investment can be run in a number of ways, with the variable of “leverage” in play.  The more leverage, the more risk in many cases.  Or, perhaps you’re leveraging in order to free up cash to multiply your properties.  If you don’t sleep well at night, high leveraged returns may not be as valuable to you as you thought.

The next time you begin the process toward the purchase of an investment property, use a two-fold plan of Quantitative and Qualitative analysis to make sure that you’ll be happy with your decision down the road.