Real Estate Investing
MODULE 6: Making Money in Real Estate, Lesson 6
How to become a Top Real Estate Investor?
Adnan Ul Haq
Module 6:Making Money in Real Estate
How to become a Top Real Estate Investor?
Adnan Ul Haq
Well, if you're looking for some real estate investing advice, then look no further. We've got the secrets that will help put your mind at ease and teach even those with little experience. We will tell you how to become a top investor.
To become a successful real estate investor, you have to be both professional and employ some techniques.
Real Estate Education
Investing in real estate is not an easy task. You need to have the necessary knowledge and skills if you want your investment to be successful! Therefore, your first priority should be to get a real estate education. This education will make you stand out from ordinary investors, will develop your analytical abilities, and will improve your decision-making ability.
Legal Documentation Awareness
You need to know from where you need to get the documents, which documents do you need, what should be the value of the documents, what is the DC rate, what is the FBR rate, what is actual evaluation, etc. You need to know how to do a legal agreement and where is it to be registered.
It is important to understand all these things because if you don’t understand them, then you will most likely get stuck at some stage because legal litigation is a lengthy process. The quality of a good investor is that he picks these things at the right time.
Learn Basic Terms
Learn the basic terminology.
For instance, there is a term “DC rate”, which is the term upon which the stamp duty is computed. Similarly, another term is “FBR rate”, which shows you the value of the property according to the evaluation of the FBR, and withholding taxes based upon the FBR., so you need to know all these terminologies.
You should also know how to deal with a filer and a non-filer.
Understand the Basic Legal Process
You need to know the whole legal process of working in the real estate sector. For instance, do you first need to make the sale agreement, or will you first take the token, and what are the processes that will follow? S
o, it is better to understand this whole legal process. For this, you need to go through this process yourself two or three times.
Define Area of Competence
Defining your area of competence is very important. You need to know which area of competence you have in which you will invest in real estate. You need to build your skillset in that particular area.
For instance, is it in a commercial area or in a residential, is it a rental property or buying-selling property? So, things will become easier for you when you define your area of competence.
Warren Buffett also recommends that if you define an area of competence and keep gaining grip in that area, then you can earn huge profits.
Build a Network
The most significant player in the real estate market is inventory. Inventory defines the areas and places where real estate is being bought and sold. You need to have the information of the inventory that where sellers are selling more properties and where the buyers are buying more properties.
This inventory information comes to you through a network. If you have a customer network or an agent network, etc., they will become your source of information. So, the network in the real estate sector has prime importance.
4 Significant People in Real Estate
You need to have firm connections with these 4 people, even firmer than that of a sibling relationship.
The first person is your agent. Your agent helps you to buy, sell, or rent properties. It is very important to maintain a connection with him.
The second person is the lawyer. You will need them in the buying process for agreements and legal documentation. If you have a connection with a good professional lawyer, then your documentation will become easier and error-free. They do charge more money, but it is all worth it.
The third person is your tax accountant, a charted accountant, or a management accountant. This is the person who has a firm grip on the matters concerned with taxation. Such a person will give you very good advice to solve your tax issues in real estate investments as they arise very often. So, if you find a good accountant, it will help you a lot.
The fourth type of person is your valuator. Most of the time, you are unable to determine the value of a property yourself. But, if you have a good valuator who has gained these skills properly, you should use their skills.
He will tell you the total price of the property as well as its fundamentals like the construction details etc. which determine that cost.
If you remain connected to these 4 types of people, then you will make a well-informed decision when the time comes.
Build Good Location Checklist
Always buy a property based on its fundamentals like its construction, area, location, etc. For this, you should build a good location checklist and define a good location through that checklist.
For instance, it should have access to schools, hospitals, and it should be approachable. You should evaluate a property against this checklist. It helps you make a better decision and also helps you negotiate the total price of the property with a seller.
Benefits of list-making include:
- Your decision-making becomes easy
- You can promptly negotiate with the seller
Determine Your Exit Strategy Before Hand
Before buying the property, you should know how you will exit it. This means you should not buy a property without any aim or purpose for the sake of it. You need to plan how you will exit from the property and when you will do it.
Investing in real estate is not an easy task. You need to have the necessary knowledge and skills if you want your investment to succeed!
Conduct a Comparative Analysis
Conduct a comparative analysis based on your past experience. For instance, you would have different properties; some of them would help you gain 15% returns, some would provide you with 10% returns, etc.
So, you need to conduct a comparative analysis because it helps you to make a wise decision and benefits your investment.
Define Good Return
So, you need to know prior to buying a property that if a property yields 25% return is it the most optimum choice, or should it give you 30% returns. You should define this beforehand, and your buying decisions should be based on it.
The basic rule in real estate is making a smart decision at the right time, and that will help you earn huge benefits in real estate.
Beware of the Property Frauds
Before making any decisions, do due diligence and follow a proper process to ensure that you are making the right choice. This will save time in case there is fraud involved with your purchase!
The path to becoming a top real estate investor is not an easy one, but with patience, hard work, and focusing on the above-mentioned points, you can achieve your goals.