Q: I’m struggling to get into the real estate investor business. What would be the best approach, given that I have limited funds and little experience?
A: The best thing you can do is to read everything you can find on the topic of investing in real estate. While some of what you read won’t apply, the rest will help you form a base of knowledge about the way different parts of the business work.
Then, start to put together a team of advisors who can help mentor you. You’ll want a knowledgeable attorney, mortgage lender, real estate agent and accountant.
Once you have a basic understanding about how real estate investments work, it’s time to make your first purchase a personal residence. Buying a place to live will allow you to make a good investment on reasonable terms. And, you’ll see first-hand how much it takes to find the right property, negotiate a reasonable offer, close and move. You’ll also have a better understanding of costs.
Buy your personal residence with an eye toward turning it into your first investment property. When you’re ready to buy another, put in the time to really check out the market, even if it takes a year. It’s better to wait to find the right deal than just charge ahead and buy anything.
Most important: Know what your exit strategy is before you even make an offer.