Every real estate investor desires to increase their investment portfolio. Fortunately, you can own as several properties as you want, even as a newbie in real estate. How best can you achieve this? By conducting in-depth research and investing according to your financial goals and present finance.
While you might think it impossible to buy sufficient properties for your retirement, because it takes a long time to save enough money and buy a property, you can start building your real estate empire with a bit of money and enough determination. Would you need too much money for the properties’ down payments before starting? Not really.
We agree that buying properties is a capital-intensive process that involves you dropping about 20 to 25 percent downpayment except for your first few purchases. However, there are strategies to employ to kickstart your journey into building your real estate empire. Information is power!
And right now, I’m about to arm you with a tested and trusted step-by-step guide that will see you build a real estate empire by the book in less than ten years. Stay with me if you want to see building a real estate empire process explained.
A Step by Step Guide to Building Your Real Estate Empire
Conduct Extensive Research on Real Estate Investing
Before plunging your head into real estate investing, you need to conduct lots of researches. Expand your skillset and stay on top of the industry trend even before purchasing your first investment property. Many property investors have lost money because they choose to jump this step. Visit related blogs, read books and magazines, attend seminars and webinars, and listen to podcasts to gain adequate real estate industry knowledge.
While it isn’t possible to completely know everything about real estate investing, the goal is to amass as much information as you can. Only take a step towards buying a property when you’re confident that you know the ropes of real estate investing to avoid costly mistakes. You can work with an experienced real estate investor or get a good mentor to quicken your learning process.
Choose an Investment Strategy
To build a rental property empire, you’ll need a strategy. Ask yourself, how am I going to turn my investment property into profits? There are lots of real estate investment strategies you can utilize. However, choosing the best approach will help you maintain your focus and move beyond just buying your first property. It’ll also make building your real estate empire easier. Some strategies you can choose from while building your real estate portfolio include buy-and-hold, fix-and-flip, and wholesaling.
Explore Financing Options
Getting real estate investment financing is one challenging part of buying properties that new investors need to pay much attention to. Decide on an amount for the investment and look for its financing before you start hunting for your first property. You can finance an investment property through real estate partnerships, conventional mortgages, seller financing, private money lenders, cash financing, or home equity loans.
Check and compare various financing options to determine which is best for you. The right investment financing for you will depend on your eligibility, interest rate, loan amount, loan term, costs, and loan type. Ensure you know your credit score and keep enough money for a downpayment.
Hire Real Estate Professionals
While trying to build a real estate empire by the book, consider hiring a team of professionals to help with managing the rental properties. You’ll need to include mortgage brokers, attorneys, home inspectors, accountants, property managers, amongst others in your team when building a real estate portfolio. That way, you can have more free time to continue expanding your empire. Remember to build a team you can work with for the long term.
Acquire Your First Property
Now that you’ve put everything in place, it’s time to buy your first property. Remember, you can’t build an empire in just one day. You have to start small and grow your portfolio from there. Don’t forget that your first investment property’s performance will largely influence your success as an investor. You may ask how? The answer is that it’ll influence your ability to purchase another property. Always opt for cash flow properties with a good return on investment (ROI). With adequate tools and knowledge, you can find a good property to buy.
Purchase More Investment Properties
One secret experienced property investors use in building their real estate empire is buying multiple rental properties. It’s usually challenging to buy the first investment property. But after that, there are several routes you can follow to get more investment properties.While saving up to purchase another investment property may take many years, you can leverage your home equity to get funds for a second property.
Another way is to use positive cash flow from your first property to buy the next one. Keep repeating the process and amass several rental properties. With several income properties generating positive cash flow, your real estate empire will continue to grow while you consider investing in bigger projects with greater profits. Nonetheless, bear in mind that bigger projects equal higher risks. So ensure you conduct adequate research before investing.
Diversify Your Portfolio
While it’s tempting to buy properties at the exact location, especially if the return on investment is high, it’s a risk that you might not want to take. For instance, if the location experiences a bad real estate year, you may find it hard to rent out all the space in your properties, which slows down your financial growth. What is the solution?
Consider diversifying your real estate portfolio by investing in diverse property types and multiple locations. For instance, you might start with a single-family home and diversify into buying multi-family properties. You can also purchase properties outside your location. Keep exploring various opportunities as you grow your real estate empire.
To make enough money in real estate, you’ll need more than a single investment property that you earn monthly income from. It takes relevant knowledge, consistency, good planning, and lots of effort to build a real estate empire by the book. Following the real estate portfolio strategy mentioned above will have you on your way to becoming a millionaire or billionaire through real estate investments.
Simply find a strategy that works for you and be consistent. Learn from your mistakes and adjust your plan when necessary. Just like Rome, your real estate empire won’t be built in a day. However, to hasten the process, contact The Short Term Shop. Their team of real estate investment experts helps new investors buy properties at locations with high potentials so they can quickly grow their portfolios.