Ask anyone that has made a lot of money in the Real Estate "Game" and they will tell you that they follow a business plan (Action steps) and do not leave things up to chance.
These action Steps should give you an idea of the road map you can follow towards wealth building.
•Step 1: Develop a business plan (Real Estate is a "business" whether you have 1 property or 100)
•STEP 2: Make good practical decisions right from the start. Become a student of this "game "and learn as much as possible even before you make your first deal. Develop a working relationship with a Realtor that has expertise and also is an investor.
•STEP 3: Look for properties that are in family friendly neighborhoods. The right property attracts the right tenants or buyers. Our suggestion is to find the worst property on the best block, since you can make many changes to a property but you can never change its location.
•STEP 4: Develop a relationship with a local bank. We can give you some suggestions of banks that we work with ourselves.
•STEP 5: Get comfortable with risk: How much financial risk are you willing to take on? As you know Real Estate deals with money, not necessarily your money but a majority of the time it will be borrowed from # 4. Get comfortable with the financial numbers and concentrate on increasing property values.
•STEP 6: If you currently do not own any investment properties start out with a house or duplex, it is a great first step
•STEP 7: Fix up #3. This may include everything from exterior paint, updating the kitchen and baths, landscaping etc. Try to hire a contractor that can do most of the work. Nicely updated properties will merit a much higher rent and a better tenant. Find out if remodeling will be requiring a permit.
•STEP 8: Keep your personal expenses low. Reinvest any profits to increase your holdings.
•STEP 9: Continue purchasing properties as you get more and more comfortable and you have the financial resources to do so.
•STEP 10: Diversify your holdings. Rent only to tenants that meet your criteria (credit, criminal check, landlord verification, employment history).
Overall Tips & Warnings
•Interview several local banks to determine where you can get the best terms. Interest rate is only a small aspect of your consideration. Can you establish a line of credit, a note, etc? If you can set up a line of credit you can pay cash for this property (ies). It is important that you buy undervalued properties that after repairs and updates will increase the value and then you can term them out (permanent loan).
•Some believe there are a lot of secrets out there and I talked to a number of participants at our seminars that read one bok after another on real estate, attended seminars that promised a lot and paid a lot of money for all these secrets, etc (they would have been better of by putting the money for a better use, like a down payment, repair costs etc and they would have been money ahead.
• The real estate industry is filled with "get rich quick" programs with a lot of empty promises. We have no secrets. Your best strategy is to work with a reputable Realtor that can bring you experience and expertise and who themselves are investors. They can guide you step by step and can give you practical rather than philosophical knowledge.
• Whatever you do, do something. You can get into information overload and if you don't get off the starting blocks you will never be on the road to generating wealth.
Lot's to think about.
Here's your first step: if you are interested in becoming a landlord feel free to contact anyone of us on the Omaha Real Estate Investing Team for a confidential consultation: Prudential Ambassador Realtors Fred Tichauer, 402-679-3914, Shawn Prouse, 402-955-9058, Kelly Kirk 402-680-4153 , Luis De La Vega at 402-306-1212 and Paul Sadofsky at 402-680-7268 and you will be happy that you did.
We consider ourselves to be one of the most experienced team in the Metro/Omaha area. With us you can count on: Excellence, Trust, Commitment, Honesty, Integrity, Leadership, Expertise, Practical Knowledge, Results and over 60 years experience as investors. Call us for a no obligation and confidential consultation. We are committed to helping you get started on the right track.
Also check out our web site for additional information