The real estate industry in the US is a culmination of 335,000 companies that collectively churn out a total revenue of $365 billion. The industry suffered a major setback back in 2008, but it has come out stronger than ever in the last few years. Just in 2018, 1.19 million housing units were on sale in the United States.
Industry success not only depends on government policies and market conditions but also on investor success. And since investor success is a function of the right knowledge, strategies, and traits, in this post, we will talk about what makes someone a great real estate investor.
Knowing the market
A successful real estate investor is one who strikes while the iron is hot. This means acting when market conditions are favorable. By ‘market conditions,’ we mean macroeconomic indicators that affect housing prices. These include consumer spending habits, purchase power, inflation, employment rate, and also lending and borrowing rates.
Real estate investors also need to be aware of the best-selling neighborhoods in the state, their historical prices, and current trends in prices. They should also know and understand the way consumers or tenants in their neighborhood react to changes in prices. This helps them decide the right time to buy or sell their securities.
They also need to be able to foresee how the housing market will fare in the future. The best way to do so is to read up on the latest economic news, as well as government policies regarding real estate. Keep an eye on what other investors are doing and how it’s affecting their portfolio.
Compared to stocks and bonds, real estate investments don’t mature nearly as fast; this includes their prices. Unless there has been a major change in borrowing rates or policy, you can’t expect property prices to skyrocket.
If you’re new to the business, know that it’ll take time to get accustomed to the market, gain knowledge, find the right customer, and understand the risks involved. In the case of a fix and flip investment, for instance, it takes time for the property to regain its value after repairs have been made.
None of this knowledge comes from a crash course or a book. It takes time for you to learn this through trial and error. You’ll have to speak to brokers, dealers, and real estate agents before signing a deal. Remember, persistence is the key to success!
The right financing
Without the right financing solutions, it’s impossible for an investor to realize their investment objectives. But finding appropriate financing is particularly tough if you don’t have the most impressive credit score or a consistent stream of income to pay back the loan.
Financial institutions like banks carry out a thorough evaluation of your creditworthiness before lending cash. In this case, hard money loans are a godsend.
These are lent by private lenders for real estate financing purposes. Unlike conventional bank loans, a private lender doesn’t carry out extensive checks. The process is simple and easy and there are no strict requirements.
All you need to do is deposit collateral that has an equal or greater market value and you’re likely to qualify for the loan. You can also speak to your lender and negotiate the terms and conditions of the loan.
If you’re a real estate investor who just started out, the commercial lender we recommend is Global Capital Partners Fund LLC. They provide commercial real estate financing solutions to investors and homebuyers across several states in the US.
To get started, contact them via their website. You can also give them a call at +1-800-514-7350.