Investing

What is Real Estate Investing?

Aerial view of of a residential neighborhood in Hawthorne, in Los Angeles, CA

Investing in real estate is more than flipping houses.  It’s the path to creating wealth through purchasing, holding, leasing, managing, and selling Residential and Commercial real property and Residential and Commercial real estate products.  I serve Investors in many ways as their Realtor®. including Listing and Buying Multifamily and working with Investor Flippers following a Slow-Flip Lease Option Program.  

But, back to Investing and where it all began…

Real Estate Investing has been happening for a very long time, in fact, since the time of hunter-gatherer societies, where families recognized the land as owned by the king and his direct family.  In exchange for food and living on the land, these families served as the protective members of the community.  Eventually, the ancestors of these peoples would become the historical owners of the land.  When the Americas were colonized and settled, the profits from agriculture and taxation on neighboring lands by the founding settlers produced sizeable profits.  

Today, real estate investing is one of the most sought after businesses that individuals transition into from their regular jobs and careers, and some might argue it has become overly saturated.  Since the dawn of TV shows like Flip This House in 2005 and many more thereafter, the potential profits sparked the interest of your average DIY-er, and flipping homes (the process of buying homes that need repair, making improvements, and selling them for a higher price) became the entry-point to wealth creation for the everyday non-real estate professional.  

As flippers became highly seasoned in residential flipping, they entered into the real estate investing education side of the industry and started teaching others how to invest in real estate.  Some of these teachers wrote great books and offered reasonably priced courses based on their tried-and-true experience.  But eventually, many gurus stepped in and charged exorbitant fees for others to learn their unique methods and secrets for profiting in real estate.  

Because I know time = money, it may benefit a new investor to take a course, but I always recommend that they do their due diligence first, see what is being offered, read up on the guru or mentor, and don’t just read the testimonials – check in social media groups for feedback on whether the teacher and the course is legit and worth the educational investment. 

While there are some great courses out there, (and I do recommend working with a mentor as a new real estate investor), you can find everything you need to know about real estate investing on the internet – if you have the time.  So, it might be a better option to save your capital for you first investment and start by self-educating.  While education in real estate investing is on-going, I recommend you start with Gary Keller’s top three focus areas: Criteria, Terms, and Network. 

Criteria: I ask Investors this all the time what their criteria is, and I’m surprised when all they send me is a price range and how much they want to earn.  Investor Criteria includes much more, like Market Statistical Area (MSA), submarkets, property types, construction, size,  type of rehab or renovation you do, if you plan to rent or resale, and so much more! 

Terms: You need to know your terms, and this means you need to know how to negotiate.  Terms include your maximum acquisition price, maximum cash capital you have to invest, maximum lending terms, and much more.  One important aspect of terms is knowing Creative Financing.

Network: If you haven’t heard it yet, make this phrase a mantra in all of your business dealings: “Your Network is Your Net Worth.”  It doesn’t get any simpler than that, and if you intend to create wealth through real estate, create real relationships.  Your network includes other investors, mentors, service providers,  contractors, lenders, clubs and groups, and one of the most important – an Investor-Friendly Realtor®.  

As Gary Keller says, “Criteria identify, Terms determine, and Network supports all the investing you do.” 

To find out more about the ins and outs of real estate investing, visit my Blog category, Investing. If you are an Investor and are seeking great properties and how to make great profits, consider my Slow Flip Lease Option Program.  I am happy to provide you with representation, guidance, and support and would like to create an Real Estate Investing Plan & Strategy, contact me today at 310-383-7393 or nina@ninagrayson.com

 

Real Estate Investing Tip

  • Whether you are a new or seasoned investor, create your Real Estate Investing Plan by evaluating your financial position and the amount of capital you have available to invest and the level or risk you are willing to take.  Continue to evaluate your finances and adjust your plan every three months so you know what actions you need to take to realize your goals.