| Real estate investing requires a fair amount of | | | | into trouble. |
| knowledge, and the first things you need to learn | | | | 3. Look for and use methods to reduce risk. Have |
| are some basic principles. | | | | inspection, financing, and other contingency clauses |
| There are real estate investing "tricks" and | | | | in the offer, so you'll get your deposit back when |
| techniques that you may know, or want to know. | | | | a deal falls through. Consider your exit strategy |
| There are new ways of doing things that are | | | | before you buy, and have a "plan B." Value real |
| worth learning. Knowing about the latest types of | | | | estate using comparables or cap rates, not |
| financing is another way can also help. Before all | | | | "hunches." Buy through your corporation or LLC. |
| of these, however, you need to learn some basic | | | | 4. Be prepared for real estate investing. Have |
| principles. Here are six of them. | | | | business cards, pen and paper on you at all times. |
| 1. Build relationships. | | | | You never know when you'll see a property for |
| 2. Understand the numbers. | | | | sale, or hear about one. Sometimes, when you |
| 3. Reduce risk. | | | | mention that you invest in real estate, sellers, |
| 4. Be prepared. | | | | buyers and other investors suddenly appear with |
| 5. Set goals. | | | | information, opinions, and sometimes even good |
| 6. Learn, and apply what you learn. | | | | deals. Be prepared. |
| Real Estate Investing Principles | | | | 5. Create action-oriented goals, not just wishes. |
| 1. Real estate investing is about relationships. | | | | For example, require yourself to look at a certain |
| People are your most valuable resource, and the | | | | number of properties per week, and maybe even |
| more of them you know, the more likely you are | | | | to write a certain number of offers each month. |
| to find good properties to buy, or buyers for | | | | Set goals for all sorts of little steps, like making |
| your properties. ask people for their names, and if | | | | six phone calls per week, checking online listings |
| your memory is poor, take notes. Know the right | | | | twice per week, and so on. Action creates |
| people too, including a real estate agent who gets | | | | momentum. Repeated action creates habits, and |
| many listings of the type you are interested in. | | | | good habits lead to more successful real estate |
| Wouldn't it be nice if you were the one he called | | | | investing. |
| first? | | | | 6. Keep getting educated, and using that |
| 2. Know and understand the relevant numbers. | | | | education. Learning more from books, magazines |
| When you look at a rental property, for example, | | | | and even tapes or CDs is a great idea, as long as |
| you should be thinking about the income, the | | | | you spend as much time doing something as |
| expenses, and the capitalization rate, or "cap rate." | | | | reading about it. Some of us let the interest and |
| Imagine how certain changes would allow you to | | | | enjoyment of reading about investing get in the |
| raise the income, and what that would do to the | | | | way of actually investing. Good information is |
| value. A "feeling" about a property, without | | | | crucial, but it should lead to good real estate |
| understanding the numbers, gets many investors | | | | investing. |