THE TEN BUILDING BLOCKS OF PROFITABLE REAL ESTATE INVESTMENTS

THE TEN BUILDING BLOCKS OF PROFITABLE REAL ESTATE INVESTMENTS

As a successful investor, it is advisable to have a framework to operate. These ten pillars is a theoretical framework to enable you identify some markers for you to operate efficiently.

1. Identify Your Winning Formula: A winning formula is a set of rules that you use to guide you in your investment decision making process. When you have a winning formula, it helps you narrow your focus and able to pass over deals that fit the criteria.

2. Identify Your Niche Market : It is crucial for you to identify your  market. Define exactly the kinds of property you want to buy and the profit you want to make on each of them. (If does not fit the criteria do not buy it).

3. Know Your Financial Numbers : The numbers always tell a story - The Return On Investment, Cash-on Cash Return. You can pay a full price for a piece of property and still make money.

4. Know The Psychology of Investments:  The mechanics of the buying process - Remember that 80%  of the time you would be making offers.

5. Identify Your Target Market For Selling The Property: Mostly First Time Home Buyers and how to market to them. First time home buyers are always interested in some kind of First Home Buyers Assistance so get them some assistance. Have a specific market plan in place to sell your property. For example, a data base of customers ready to purchase.

6. Identify your team members: (Attorney, Accountant, Mortgage Banker, etc.). You can create a leverage through them.

7. Know Your Exit Strategy:  Are you buying to sell, rent, lease purchase etc. Are you creating a cash flow or cash out? You should know this exactly before you structure the deal. The exit strategy would have a great implication on your taxes.

8. Know the tax implication of Your Deals:  Do you want to hold title under a corporate structure - Limited Liability company, S-Corporation, C- Corporation

9. Create a business : Create a business plan for effective utilization of your resources. Identify how much money you want to make and shoot for it.

10. Monitor the real estate market: markets change all the time so you have to keep abreast of the markets though reputable publication and resources. For example, in certain parts of the country, we are in a seller's market so you need to change your strategy to take advantage of the market conditions.