This may be the toughest part of the FAQ investment questions, who can help me get started? Let's think about medicine to start with, if you have cancer or heart issues do you ask for your GP to take care of it? No, you go to a specialist who has devoted themselves to taking care of you for that one particular problem. This is not to denigrate general practitioners because they perform a valuable entry service. Real Estate is a bit like that. We have plenty of people who know a little bit about a lot of things but not one particular thing down cold. For instance, I thought I knew a lot about new construction because I sold it and had taken classes like with CRS, but until I had a custom home built I realized how much more there is to know about it. Other specializes in real estate work the same way and very few agents want to devote their entire business to one specialty
On the other hand there are agents out there around the country who are like me, they eat, sleep and breathe investment real estate. I learned many years ago it is what I truly loved so I dedicated myself to creating wealth through selling investment real estate and also I have a seven figure equity in my own real estate a few times over. If you are looking for a real estate investment specialist here are a few questions to ask.
Do you own rental property? Would you buy a $500K personal home from someone who has never owned their own home? I know I wouldn't. Why not also ask them about what they are trying to sell you with would you buy this for yourself? I have built my career on that.
Tell me what is a good buy versus a good investment: You can get a home at a discounted rate, but if it is in an area going nowhere and is in high vacancy, then all that money you thought you saved on a purchase is lost in being empty. Let me continue this with another related question below.
What is my return on investment? Ask them about internal rate of return, cash on cash, and capitalization rate. What does gross rent multiplier mean? If they are doing a real estate investment out of a 401K what is the DCR, or debt coverage ratio. These are a few of the many questions that you should ask before you select help.
What is the exit strategy? One of the most important and least explained part of investment is what is at the end of it? That kind of goes with why but you also get into a 1031 exchange possibility, what is the cash out implications on being taxed, and if things go south can I get out of this? Speaking of that very few agents have an exit strategy for their business so don't leave your self in the hands of amateurs.
Should I use a property manager? For out of state buyers this is essential but for local people a real estate investment specialist will explain why paying a great property manager is something that saves you money and headaches in the long run. I will expand on this conversation in another unrelated post from the FAQs but in my case I own my own property management company because I have a vested interest in the clients success and want them to buy more. FYI, I have specialist for that and that is not me.
I spend a lot of time with my investors before they ever have a contract written because for me when someone is putting 20% down or more and putting their financial future in my hands this isn't about a commission to pay the bills, it is about trust, integrity, empathy, and all the expertise I can muster and than learning never stops. In the next post I will get into the where but please, when it comes to finding that real estate investment specialist, do e en more due diligence. With over 2500 investment properties sold I can never rest on my laurels and never assume i can't learn more to be of service to you.