Investing

6 Best Secrets of Real Estate Investors

The secrets you must know before investing in real estate

6 Best Secrets of Real Estate Investors June 14, 2017Leave a comment
Real Estate Business
Real estate business (credits to pexels.com)

Real estate investment is a source of passive and active income. This is due to steady rate of property appreciation. Prospective investors finding ways of saving for investment may consider real estate business. 

However, the business experiences varying degrees of risks. Despite the real estate risks, a few investors emerged successful. While countless of other investors are running into losses that are avoidable.

Let us examine real estate during 2007/2009 global economic recession. Then, we can discuss the secrets of successful investors.

CNNMoney claimed that unprecedented foreclosures filings took place in America in 2007/2009. During the 2007/2009 global economic crisis. “Florida filings soared 133%, hitting more than 4.5% of all households, while Arizona filings jumped 203% to 4.5%”. Also, “..California had the highest total number of filings for any state, 523,624, more than double 2007 levels”.

According to statistics by Forbes:“the median sale price for a home in the U.S. was $200,000”. By the time the market reached bottom, “prices had dropped 29%, to $140,000”. Suffices to say that the foreclosures crashed the value of properties. Although, the business saw untoward crises in the past, that doesn’t stop regular earnings of investors who know the secrets.

For earning during crises, there must be something they were doing right. If you haven’t created time to figure it out then, you are about knowing their secrets.

Warnings:

A budding investor shouldn’t rely on podcasts, videos, e-books and articles on real estate. They do contain different opinions. Such opinions are often conflicting in nature. And it takes more than that for a potential investor to excel.

You need to invest your time in real estate basics before you can excel. And ask yourself what the failures are missing? Have you ever sat down to query the secrets of successful real estate investors?Failure is knocking if you are after quick money.

Here are the 6 big secrets of successful real investors:

#1 Understanding of Real Estate Basics

Investing in a business you are clueless about is an invitation to failure. Likewise, failed real estate investors are those who jumped into the business. They failed due to inadequate knowledge of real estate. Adequate knowledge of how the market works is to your advantage. This puts you on a profitable pedestal.

A major concern for newbie investors is knowing the fair price of a property. They tend to avoid under-payment, over-payment and scammers. In avoiding this, the right step is to have a mentor and trusted experts. They can guide you in making fair decisions when need arises.

The Buddhist Philosopher, Daisaku Ikeda stressed the need to have trusted advisors. He said: “One who refuses to seek the advice of others will eventually be led to a path of ruin”.

Getting a Valuer, Realtor and Mortgage Broker. As well as Attorney as advisors is necessary. Never mind their charges. This will enable you to stand on bigger shoulders and speedily understand how real estate works. You would save time by learning from their success stories.

#2 Carve A Niche

Real estate business is wide, it goes beyond buying and selling of houses and land. The business encompasses commercial buildings, family houses and apartments. Raw land and Real Estate Investment Trust (REIT) are included.

Intending investors should get familiar with real estate lingo and different investment strategies. The different investment strategies are property management, flipping, rentals and many more.

For a start, it is advisable to narrow it down by focusing on one or two niches. Once you master your niche(s), you can then extend to other niches. Experienced investors attract sellers without stress because they focus on a niche. They know their onions and they are widely known for that.

Knowledge and experience are what keep them on top of their games.  Jack of all trade in real estate by a newbie investor sends wrong signal. It portrays a confused and indecisive investor.

#3 Taking Risks

Fear is normal when you are about taking a great step. Similarly, risk is impossible to avoid in any business. However, it is important you avoid engaging in blind risks.

Precaution is necessary when dealing with risks. A budding investor need to starve his fear and feed his vision. Through this, he can realize his goal of making profit. Knowing full well that success will always exist side by side with fear.

Successful real estate investors are fearlessly taking risks. An investor who is afraid of losing money in real estate business is not ready to succeed in the business.

Robert Kiyosaki; an author and real estate investor said: “I never met a millionaire that hasn’t lost money on an investment, but I’ve met lots of poor people who have never lost a dime on an investment”. This affirms resilience and persistence of today’s successful investors. They once lost fortunes and felt sad.

With determination, they learnt their mistakes and struggled with focus until they succeeded. They have guts that is why the market is in their favor.

Worthy to note that there is a tipping point when it comes to taking risks. You shouldn’t take blind risks but, a calculated risk. The risk should base on a satisfactory conviction.

#4 They Ask Questions

Most times, a newbie investor is attracted to a property that fits his wish. Often times, he doesn’t pay attention to likely losses if the property is bought at all cost. While an experienced investor rely on the outcome of fact findings. The property under consideration is properly checked before sealing the deal.

Skilled investors are known for investigating properties. Thereafter, find satisfactory answers to important questions before signing an agreement. This is why negligence of important questions while buying a property is not advised.

Some of the important questions are:

  • Why selling the house?
  • What is the cost of similar properties in the locality?
  • What is the state of the property?
  • The estimated cost of tax and utility bills?
  • Who are the property’s previous owners?
  • Is there prospect of development in the property’s location?

Nobody likes buying a damaged or stolen property. These questions might seem not important but, they are essential when buying a property.

#5 Research

The services of right team in research, analyses, and comparison enhance relative prediction. They forecast the future value of the property by considering certain parameters. The main goal is getting a regular and reliable prediction.

Philip J. Anderson in his research discovered that, “For the first 144 years of real estate enclosure in the US, land sales and / or real estate construction peaked almost consistently, every 18 years”.

U.S Land Sales 18 Years Cycle
U.S Public Land Sales, Acres ‘000, 1800 – 1923 (Credits to Philip Anderson J)

Thereafter, falls and rises again and the cycle continues. Though, the 18 years cycle stopped at the end of the Second World War.  Evidence clearly shows the current cycle follows the 18 years forecast.

Successful investors mastered the art of watching the rise and fall of real estate business. They use it to decide when to buy and when to sell properties. Only a smart real investor could notice that real estate investment in America follows a cycle.

#6 Networking

Art of networking is a crucial trait every experienced investor adopt. It facilitates rapport with influencers and investors within and outside their niche(s).

Successful real estate investors create time to attend association meetings, workshops and conferences. That’s where they meet fellow investors and realtors ready to partner on new projects. They build their networks through these. 

Networking is an intimate avenue to learn the latest developments and partnership. It creates opportunity to share new ideas and strategies that will promote your niche(s).

These are essential secrets used by successful real estate investors. Many budding investors should consider adopting them.

Now that you know the secrets, no need to wait. What are you waiting for? If you adopt the best secrets shared above with sincere effort, financial independence is assured.

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