How to Begin Investing in Real Estate
By RBD Ventures, Inc.
In our opinion, to begin investing in real estate, even if you’ve got tons of your own cash, you should learn how to wholesale right off the bat. You’ll learn how to buy and go through a transaction before you add the stress of a rehab onto yourself.
Not only do we encourage beginning investors in real estate to learn how to wholesale flip a property, we encourage advanced investors to learn too.
You’d be surprised how many experienced rehabbers we’ve come across that didn’t understand that wholesaling is an exit strategy. We’ve seen investors back out of properties or give them away for nothing because they didn’t know how to profit from them!
This is exactly how we did it:
-Build a buyers list.
-Find an escrow company that works with investors and understand double escrows.
-Find a contractor or someone who can help you with a repair estimate if you aren’t able to yourself.
-Get a proof of funds (you’ll need it to submit with your offers).
-Network like your life depends on it. Let everyone know you are a cash buyer and you can close in 7 to 14 days.
-Get access to the MLS or learn to use an online site like Zillow or Redfin.
-Learn how to determine ARV (After Repair Value) and your MAO (Maximum Allowable Offer).
-Start making offers.
-Get your offer accepted and immediately offer to your buyer list.
-Accept an offer, collect the deposit and open escrow.
-Close escrow and get paid.
Seem easy? There’s a lot of moving parts to it. But you can do it. The key is getting enough education to propel you toward real action.
For the experienced investor: Build a buyer list. You may find yourself in a situation in which you have a property under contract but lacking funds at the time to close. Why not make at least a good $10k instead of giving it up?
If the thought of taking on all these tasks alone is overwhelming or you have a full time job and can’t imagine how you are going to tackle these steps part time then you may want to look into teaming up with someone. That is certainly what we did. Although having partners isn’t for everyone it certainly has its benefits and depending on your goals, it may be the most logical step for your business.