Without a doubt, the rise of social media has increased the online presence and apparent ubiquity of successful real estate investors across the nation. However, that doesn’t mean that every piece of real estate investment advice you encounter online is legitimate. In reality, these investments cannot be rushed, there’s no “magic bullet” that beats a systematic approach, and most new investors fail to turn a profit.
What Real Estate Entrepreneurs and First Time Investors Need to Know
Below are the top 3 tips I recommend for those new to real estate investment:
Tip 1: You Need to Have Good Credit and Liquid Cash
Above all, first-time investors and new real estate entrepreneurs should aim to be valued investors. This means ensuring that your credit is good and that you have sufficient liquid cash to work with.
As an experienced private money lender, I have noticed certain trends that are best avoided. For example, when ambitious new investors suffer from bad credit, they often fail to focus their energy on fixing the problem. Instead, they’ll waste 10x more time trying to find a workaround–which never works in the end.
Tip 2: You Need to Build a Team
As a first-time real estate investor, expanding your network is crucial. To be a successful real estate entrepreneur, you yourself need to have experience or partner with someone who does.
Jumping headfirst into a real estate investment with no experience can be incredibly overwhelming. Instead, go in with someone who’s been through the process before to learn how it’s done. If you can partner with someone who’s the majority shareholder of the LLC, you and your partner can sort out the numbers you ultimately want to earn on the profit. During the deal, use your partner’s experience and credit to your advantage.
After a few deals, you’ll have valuable experience under your belt. While you may lose money at first, you’ll have learned the process, built your network and made yourself a much more desirable borrower in the long run.
Tip 3: When the Numbers Don’t Work, Walk Away
When you use a rehab loan or a private lender like Stratton Equities, they serve to ensure that a deal is profitable at the end of the day.
The best way to utilize a private money lender to receive the financing for an investment property is by allowing the mortgage company to provide the funding for the bulk of the deal.
In doing so, the prospective borrower/real estate investor’s loan scenario is put through the underwriting process which not only reviews the property’s value, it makes sure the loan scenario is a profitable investment.
The goal is simple: learn to leverage your money
With this in mind, I caution real estate entrepreneurs to keep their emotional attachment in check. Don’t get fixated on a specific property and scramble to make it work. If the numbers don’t add up to a profitable investment, walk away.
The Bottom Line: Be a Better, Stronger, and More Secure Borrower
Any ambitious investor who wants to be successful needs to focus on becoming a more secure and desirable borrower. This means ensuring your finances are in order, building your network, knowing when to walk away, and bringing something valuable to the table.
When you’re ready to invest, Stratton Equities can help. We are the nationwide leading direct Hard Money and NON-QM lender, with an impressive array of programs, lowest private money rates (starting at 4.375%), professional team of experienced loan officers, and quick loan approval process.
If you have an investment property and wish to speak with one of our Loan Officers, call Stratton Equities at 800-962-6613, email us, or apply for loan pre-qualification today!