What I Learned As A Real Estate Investor - Six Major Lessons

What I Learned As A Real Estate Investor - Six Major Lessons

These are some of the observations that I have witnessed over the years as a Real Estate Investor. I have participated in numerous transactions and acquired and sold a number of properties with my front money partners. Also, as a real estate instructor, I have coached a number of students and participated in numerous seminars and real estate investments trips. I am also the author of ten real estate investment manuals.

1. Know Your Niche: Defining your niche as a real estate investor will enable you to have a specific property that you are buying or selling. You will also know the profile of your buyers and sellers. Simply put you will know your target market . As somebody once said there are "riches in niches ". A niche market will enable you to focus on your specific market and enable you to do quick deal flow analysis.

2. Do Market Research: As an real estate investor, market research would enable you to define your market and approach your target market intelligently. Write a detailed plan and read it yourself. Realize that investment is a plan - a plan to get you from point A to point B.

3. There is a lag in real estate investment: like any business it takes a long time to succeed. You are going to realize tomorrow what you sow today. The instant success story is just not true. Remember it will take a long time to understand real estate investments and you have to be ready for that. I believe that 5-10 years would be a good measure of one's accomplishments as a result of the vagaries of the business cycle.

4. Know the timing: In real estate investment timing is everything. The current real estate market is very confusing, but because the market is shifting towards a seller's market, real estate investors have to devise a strategy that takes advantage of the current market condition.

5. Put together a system: I believe in systems. Systems helps you to become more efficient in what you are doing. The more you work the system, the more automatic it becomes and the more efficient you become. There will be an exponential growth as soon as you put a system together!

6. The Millionaire Real Estate Hype: There is so much hype about being a millionaire real estate investor. I know it sells books, but is the hype justified? Most people do not need to be millionaires. Start with what you want out of life. May be a home, a nice car, an educational fund for your kids, and funding for your retirement. Work backwards with the numbers and determine what you need to live comfortably. The reason is that you increase your risk factor any time you buy another property. Once you are comfortable with what you have your aim should be to pay off all your properties and own them free and clear. It is advisable to have some reserve - may be a certain percentage of your net worth in liquid cash in case of emergency.  Many a real estate investors were caught nakedly exposed during the real estate melt down, because they did not have any reserve to cope with disturbance in the market place.