How investing in real estate can make you financial free

Real estate investing is simply a vehicle to improve your finances but for some it can be a criteria to gamble there hard end savings away, both are true, but depends on investors.

As always been said “there is no risky investment but risky investors” you can minimize risk away when you know what you are doing. President Donald Trump make his futune in real estate. And he said,

It’s tangible
It’s solid
It’s beautiful
And it’s artistic.

From my standpoint I love real estate. The last person anyone want to call is the bankruptcy lawyer. So, whether you’re just starting out in real estate business or are currently a real estate mogul, protecting yourself from investing mistakes is crucial.

Don’t be impulsive!

One of the biggest mistakes new investors make us being impulsive and not putting in the time or effort to ask the right questions investing decisions should be based on reliable knowledge and sound business calculations, rather than an emotional reaction or a gut-feeling.

So, when look at investing in real estate, the first thing we have to look at is whether there is enough equity and/or liquid assets to hold the property. Poor budget planning, a market downturn, unforeseen repairs or delays can seriously impart the button line of an investment. That’s why I am a strong advocate for creating strong teams, make sure you hire people who can help you asses these risks. Below are steps to determine if property is best for you.

Steps to determine if a property is right for you

is the current state of the property acceptable?
are there major structural issues?
What will need to be upgraded or replaced to make the property livable?
Will this be enough to return a profit?
Is the neighborhood promising?
How is the property zoned?

As you can see, there are many hurdles that can stop you from getting started in real estate investing. that’s because in reality, it’s not eazy. Trust me, if it were eazy everyone would be doing it. But like I said earlier, most mistakes can be avoided with careful planning.

Don’t be a flipper

The truth is real-life flippers may not find the same level of success, so many things can go wrong along the way-from choosing the wrong property and paying too much for it to unexpected and expensive repairs or not finding a buyer fast enough. This is where investing for the purchase of capital gains instead of cash flow becomes Ricky.

Let me tell you what capital gains really is?

Capital gains

Are the one-time profit you make on the sale of an investment. The strategy behind capital gains is to buy and sell, in order to realize a gain. You must sell the asset as long as market prices go-up, capital- gains investors win. But when the market turn and prices fall, capital gains investors loses.

Let’s also say it like this. You buy a single-family house for $100,000 you make some repairs and improvements to the property, and you sell it for 140,000, your profit is turned “capital gains” anytime you sell an asset or investment and make money, your profit is capital gains. Of course, but there are also capital losses. (Which occur when you lose money on a sale)

Some problem with capital gains

While there is money to be made through capital gains, it’s also important to note the risks.

It’s a formula you have to keep repeating over and over again-you have to keep buying and selling, buying and selling, or the of game and the income stop.
If the real estate market take a nosedive, “flippers” people who buy a real estate property and quickly turn around and sell it for a profit, or capital gains can get caught with inventory they can’t sell.

Build a team

Real estate is a team sport’s and you are the leader of your team. You don’t necessarily need employees, but you will need independent contractors and advisor’s who can help you in their area’s of expertise. If the idea of running this team put you off then perhaps a different types of investing suits you better.

Successful real estate investors realize the value of surrounding themselves with experts in a range of areas- taxes, the law, real estate, insurance, property management, etc. When these expects comes together out of trust, respect, and mutually desirable outcome they learn from support each other. Effectively improving the outcomes and streaming the process.

Here is a host list of advisor’s and expects you can consider in your team.

Real estate attorney: some states and jurisdictions require real estate attorneys to preside over all real estate transactions. The law vary by location, so be sure you select an attorney who is familiar with the area and the type of real estate you choose to specialize in.
Bookeeper: what often happened is that investors quickly realizes that they’re spending valuable time on these administrative tasks that they should be devoting to their investment activities. Hiring a bookkeeper is an investment in accuracy, as well as your valuable time, and it is well worth it. As he or she will assist you with the day-to-day oversight and management of your books and record.
Real estates brokers: they are essential parts of the team, they know the trends, they recognize patterns they know the market, they have access to informations you need, and they can tips you off to deals.
Real estate accountant: your accountant will analyze the records that your bookkeeper provides and ensure that your financial records are in order and compliant with the law.
Insurance agent: you’ll need to find an agent who specializes in real estates to make sure you have insurance coverage in your properties to cover risk and liabilities.
Tax accountant: a good tax accountant is a valuable member of your team, and in the case of an IRS audit, he or she will represent you. Ultimately, this person always has an eye toward minimizing your tax obligations.
Real estate lenders: this people might be mortgage brokers or loans officer’s at financial institutions, or they may simply lend money to private individuals.

4. Create a plan to find deals.

Good deals don’t just land in your lap. Finding good deals is more like a treasure hunt. You have to turn over dozens of stones before you find a hidden gem.

You should always have your washtubs ready for periods when “it rains gold,” but what about the rest of the economic times, you have to work hard and create a plan to bring good deals to you. And you have to stay disciplined either investment criteria do that you don’t succumb to fewer of a hot market.

Marketing campaigns.

There are many possible marketing campaign to choose from. And because, the marketing’s is an inexact science, the effective campaigns that are effective change like the wind. Do I recommend carefully testing different campaigns, and then stick with what work.

Here are list of some of the most effective campaigns. And they are organized at low cost.

Referral & networking campaign: talk to friends and family, and everyone you know to sent you leads on prospective properties.
Look for (for sale by owner) signs: regularly walk or drive your target neighborhoods. Looking for rent signs, vacant or run down -properties listed with agents, and vacant properties with no signs.
Use multiple listing service: these agents can set up authomatically emails that will reach your inbox anytime a new property hits the market.
Classified ads: you can advertise your service (buying real estate) through free or low costs classified ads online or in local print publications. Not every avenue will work, but if they’re low and free, try as many as possible and get your information out there. There are actually many more marketing campaigns that are out there I could share but this this (below) are effective options that are low cost and can give you some choices.

5. Go for flow

Cash flow is realize when you purchase an investment and hold on to it. And every mouth, quarter, or year that investment returns money to you. Cash-flowing investors unlike capital gains investors, typically do not want to keep collective the regular income of cash flow.

If you purchase a stock that pays a dividend, then as long as you own the stock, it will generate to you in form of a dividend, that is called cash flow, to cash in real estate. You could purchase a single family house and, instead of fixing it up and selling it, you rent it out. Every month you collect the rent and pay the expenses, including the mortgage. If you brought it at good price and manage the property well, you will receive a profit or positive cash flow.

Beside this cash flow investing in real estate has some tremendous advantages.

Fearfree retirement: one advantages of cash flow in real estate investment is that it eliminates the fear of running out of money. One concern I hear from people who have retired is, ” I’m worried I’m going to outlive my retirement account, but by accumulating asset that provides monthly cash flow, money comes in every month until you decide to sell the assets.
Control: with cash flow investing: my success is not dictated by the daily flustration of the market. I cannot control the markets, especially when it come to my money that’s why I’m not a stock trader or a real-estate flippers -i’m not good at timing the highs and lows of the stock market or real estate market and I don’t like the pressure.
Financial freedom: financial freedom is not you having thousands or even millions of dollars in the savings, yet this had being the thought of many that financial freedom is never having to work for money again. And you can accomplish this by building a cash-flowing that can be paying your mounthly expenses. When the cash flow is greater that your expenses you become financial free.