Investing in real estate seems exciting and lucrative- and it can be. The problem is there are infinite ways to go about it; single family rentals, multifamiliy rentals, apartment buildings, commercial, mobile home parks, storage units, wholesale, flipping, buy and hold, etc. I could go on and on. It’s confusing and intimidating as you begin to learn and explore options.
In our opinion, the best way to start is by defining what your long term goal is and working backwards. Are you investing to supplement your income or replace your job? Do you love your day job, but think investing would be a fun hobby that happens to supplement your income? Do you want to retire 10 years earlier? The answer to those questions will help you define your long term goals, and you can work backwards to identify the short term goals that will help you get there.
Ultimately, every investor’s goal is to have cash flowing, buy and hold rental property. In order to get there, you may have to build capital, which is where flipping or wholesaling might come in to play. Flipping and wholesaling are work. Real work. Hard work. Once you learn your market and understand how to identify and negotiate a wholesale or flipping opportunity, you can start to build some capital.
So- your first deal. What do you need? Does it need to produce capital? If so, how much capital in how much time? How will you measure your return? If you plan to buy and hold, how will you measure your return on that investment? There are many ways to calculate a return, and in future blog posts, we will explore different ways to calculate returns using different metrics.
At Boise TurnKey, we have worked with investors from all over the world, each of them in unique financial situations with a different idea of what is an acceptable return. One of the services we offer is analyzing each individual’s goal and financial situation, helping them focus on an acceptable return to help them achieve their goals.
What are your long term goals? Why do YOU want to invest in real estate?