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Investment 101

Real Estate Investing

Real estate investing is a collection of investment assets in the real estate sector all held by a  group or individual. Also known as as a real estate investment portfolio, which can include different types of real estate assets.

Real Estate portfolios can include investment properties, real estate investment trusts also known as (REITs), or real estate mutual funds. This can also include properties from different asset groups like including single-family homes, apartment buildings, or commercial properties.

Every investors’ portfolio will be unique however the creating your portfolio tends to follow the same general pattern. We have listed the steps for you to decide if investing is right for you.

GET CLEAR ON YOUR REAL ESTATE INVESTING GOALS & STRATEGY

Since the whole point of building and maintaining a real estate portfolio is to help you achieve your financial goals, the first step is to have a clear vision for what you’d like your portfolio to achieve. When you are first starting out, it makes sense to pick one investment strategy and stick to it. You can worry about diversification later.

CREATE YOUR BUSINESS PLAN

Creating a business plan will help you get clear on specific, shorter-term goals, come closer to achieving your objectives, and define the strategies you intend to use to achieve those goals.

BUY YOUR FIRST PROPERTY

Work closely with your me and my team. We can help identify the best real estate deals and financing methods for you. Once we have a property in mind that we think will make a good investment opportunity we will perform an investment property analysis to make sure it makes financial sense.

BUY MORE PROPERTIES OVER TIME

Over time, it’s important to grow your portfolio, which means buying new properties and adding them to the mix. We recommend keeping a real estate investment spreadsheet to help keep all the numbers straight.

DIVERSIFY YOUR REAL ESTATE INVESTING PORTFOLIO

Eventually it will be time to diversify. Here are a few ways to diversify your portfolio while keeping your money in real estate.

  • Real estate market: If you’ve been investing in your own neighborhood, consider spreading out some of the risk through long distance investing and exploring other markets.
  • Asset class: If you want to still focus on buying rental properties, consider branching out into apartment buildings or commercial spaces.
  • Investment strategy: If you’ve been mainly buying investment properties, you could consider investing in a REIT, a real estate mutual fund, or a real estate exchange-traded fund (ETF)

Source: Millionacres.com

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