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Getting Started

Getting Started

People everywhere are interested in real estate investing, but many don't know where to begin or how to get started. If they are brand new to investing, they may feel overwhelmed by all the information out there. If done correctly, real estate can be one of the best ways for you to make money. You can turn a profit on your investment and diversify your portfolio at the same time. But many investors don’t know where or how to invest in real estate, so they never get started.

This article will help you understand the four main types of investment strategies that make sense for your situation, as well as determining your power team and most important of all, getting educated.

The People Plan – Power Teams Investing in property is much more than just bricks and mortar. To become a successful investor, it is just as important to invest in people. Really successful property investment comes from the investor’s attitude and their network of contacts or “Power Teams” they build to grow their portfolio. Here is a basic overview…

  1. Create a trusted Power Team including real estate agent, solicitor, builder, management agent, surveyor, architect, mentor, broker, and lender.
  2. Know your strategy.
  3. Know your areas.
  4. Know your market.
  5. Know what figures will make the deal work.

An investor doesn’t need millions to invest, but a positive mindset, an eye for detail, a degree of financial insight and the determination to succeed. For the average investor it should not be deemed a get-rich-quick scheme, but a long-term strategy built from secure foundations. Some investors can be financially free in two years but for others it can take longer. Do not rely on capital appreciation of a property over a short period (though this is likely over time) but do look into the rental yield that can be achieved. Set your goals, write them down and work out how to achieve them. Education is key. Here at Legacy, we have created a top-notch curriculum and systems for you to start your real estate business. From knowing your “why,” to executing your first deal. Step by step systems to guide you through the process.

WHICH PROPERTY INVESTMENT STRATEGY IS RIGHT FOR YOU?

As an initial starting point, we should clarify the different types of property investment deals available to us, to include the following (and our Advanced Training Program covers these topics and more)!

The 4 Main categories of Real Estate:

  • Residential
  • Commercial
  • Land
  • Special Use

Residential

A Residential rental property refers to homes that are purchased by an investor and inhabited by tenants on a type of rental agreement. This type of property is zoned specifically for living or dwelling for individuals or households; it may include standalone single-family homes to large, multi-unit apartment buildings. Residential real estate can be single-family homes, condominium units, apartments, townhouses, duplexes, and so on. The term residential rental property distinguishes this class of rental real estate investment from commercial properties where the tenant will generally be a corporate entity rather than a person or family, as well as hotels and motels where a tenant does not live in the property long term.

Commercial

Commercial real estate is a property that has the potential to generate profit through capital gain or rental income. This can be anything from an office building to a residential duplex, or even a restaurant or warehouse. You can make money from leasing it out or holding it and reselling it. Commercial real estate often entails a larger upfront investment than a residential property. The potential rate of return is often higher as well. You can also take advantage of triple net leases, which place the financial responsibility for costs like real estate taxes, maintenance, and insurance in the hands of the leasing tenant. Unlike residential real estate, you usually can’t live in the property when you invest in most commercial real estate.

Land Development

Land development involves the evaluation, planning, engineering, and construction of improvements on a piece of land based on codes and regulations set by the municipality and regulatory agencies. Whether you’re an experienced developer or just starting out, each property brings unique opportunities and challenges. Some examples in real estate land development are converting an unused factory complex into condominiums or clearing land to build housing communities.

Special Use

Multipurpose or built for a specific use is categorized as special use real estate. Some examples are:

  • Mixed-use and projects that combine office, retail, and residential
  • Car washes and gas stations
  • Recreational facilities such as sports arenas, golf courses, and tennis clubs
  • Government buildings such as courts and post offices
  • Places of worship
  • Public and private schools
  • Student housing near major colleges and universities
  • Senior and assisted living facilities

SOCIAL HOUSING is a great example of a special use Public Sector housing or homes provided by Housing Associations and other Registered Social Landlords. In many areas of the country there is a high demand for social housing, especially in urban areas, so therefore it is more ‘recession proof.’ Social housing is a form of shared housing with an emphasis on bettering the lives of its residents for the greater social good. Social housing strategies include short term rentals and student housing and extends all the way into group homes and assisted living facilities. The populations we serve are always growing and are how investors who want more than just cash can really maximize their return on investment by investing in other people.

The deals are structured in several different ways and depending on where you are geographically located, you may be able to tap into local resources for funding, support, furnishings, and other critical resources you may need when starting your first home.

These are just four ways to get started in real estate investing. In each category, there is so much more to elaborate on and explore! Whatever your goals are in Real estate, we have strategies and systems for you to start your business. Education is key and learning these strategies properly will be the only way to execute your deals with a maximum return on your investment. We here at Legacy proudly strive for excellence in our education and creating success!

Areas of Review

Takeaway

Big picture takeaway points

  1. An investor doesn’t need millions to invest, but a positive mindset, an eye for detail, a degree of financial insight and the determination to succeed.
  2. To become a successful investor, it is just as important to invest in people.
  3. Education is key and learning these strategies properly will be the only way to execute your deals with a maximum return on your investment.

Reflection

Self-reflection questions to think more about the content

  1. Have I started my education towards investing? What classes have I taken and what can I do to propel myself to a deal?
  2. What is my favorite strategy that is talked about in this article?
  3. Do I have any software to look up properties in my market?

Legacy’s Building Wealth Club offers you the financial education needed to pursue your goals. Let our education and experience lead the way!

Legacy Wealth Club