A lot of people want to be mystified. Art mystifies them, so they gasp with pleasure and compliment the creator on his skill. The sciences are mystifying to them, so they aren't even interested in what it is that researchers are really up to. Investment in real estate mystifies them, so they make the assumption that it's just a lottery and that some people are either very lucky, or that they must have been born with a gift .
They refuse to accept that success in these disciplines and most others is just a matter of breaking a process down into steps and following through. Anyone who reads the Rich Dad, Poor Dad series by Kiyosaki know that, in real estate investing, there are five essential steps necessary to succeed. Investor must:
1.Learn how to speak in the language of real estate investment. This means that you should have a working knowledge of basic accounting and finance and know how to read financial statements. These skills will give you the ability to determine whether a property is assets and potential drains. It is also vital to learn about tax law, not only in order to avoid mistakes, but also to know what the great tax deductions for real estate investors are. Understanding the fundamentals of these subjects will also make it possible for the investor to know what questions to ask his accountant and lawyers upon hiring them, and to grasp the implications of what they tell him.
2.Keep himself surrounded by experts. A successful investor will network socially in order to study the people who may wind up as members of the real estate investing team of experts which he will hire to assist him in the location and evaluation of real estate. The smart investor will familiarize himself with the community of experts in the city in which he plans to invest his money, thereby familiarizing himself with the city itself.
3.Keep a close on the markets. He should read up on various cities and see what the experts have to say about them, but additionally take a look at them himself. He should study his home city twice as ardently, if that is the place he is looking to put his money. The investor should get to know economic factors and learn which areas are good news, and which are bad news. He should find out what the rents in his marker and deduce whether or not a piece of property located in that area would assist him in reaching his financial goals. He should also make personal visits and walk through as many properties as he can with his team of experts, even if he is not prepared to buy.
4.The investor should know the right and wrong way to negotiate with a seller. Many people have the wrong idea regarding negotiating. These people are under the impression the object of each and every negotiation is reach a closing regardless of the circumstances, and to strong-arm the seller into bring to light any pertinent information about your potential purchase. If it turns out that the buyer is able to make the numbers add up in his favor, and the seller agrees to his terms of sale, that is the point at which the purchaser ought to go ahead and purchase the piece of property. If this is not true, the purchaser should refrain from closing on the deal. According to Ken McElroy, author of “The ABCs of Real Estate Investing,” the investor should go into every negotiation assuming he will walk away in the end.
5. Nurture your properties. This comprises just what you would expect. Conduct the required renovations and repairs to the property and make sure to fill any empty units. Make sure the renters' needs are addressed.
This is a streamlined version of the long road to real estate investment success, but these five simple steps demonstrate that anyone can learn to succeed in the real estate business. Nothing about it is really mystical or magical about it.
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