How do I invest in Real Estate? We get this question all the time!
The 4 basic questions to ask yourself.
Disclosure: We are sharing our experiences and knowledge with you. Please do your own due diligence before utilizing anything here. This is not to be construed as investment advice. You should seek competent council before trying this at home.
So what does investing mean? The act of committing capital to an endeavor with the expectation of obtaining an additional income and/or profit.
Basic Questions for how do I invest in real estate?
- How much capital are you employing?
- What is your desired rate of return?
- When will you need this capital back?
- What is your risk tolerance?
Lets talk about Capital. The Opportunity Cost of Capital, is the expected rate of return. In Real Estate it is important to understand what other options are available that investors could earn in financial markets. This is an important question in the process of understanding: how do I invest in real estate?
Opportunity Cost in the Real World:
- Real Estate, while it can be profitable and provide an inflation hedge. There is a certain amount of brain damage to endure. Most sophisticated investors require a higher yield to deal with the risk associated with these activities.
- i.e. If a CD is paying 13 percent, why not collect 13 percent while at the beach?
- We find most investors expect at least 6 percent a year or more.
- Be mindful of unrealistic expectations for returns. Annual 30 percent returns generally require a fair share of luck and randomness to happen.
- Bottom line, unrealistic returns can lead to bad decision making…
Lets talk about risk tolerance:
- “Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it.”-Warren Buffett
- “The main danger is that the timid or beginning investor will enter the market at a time of extreme exuberance and then become disillusioned when paper losses occur.” -Warren Buffett
The SWFL REIA is the premier source for Real Estate Investing education and networking.
The SWFL REIA is different in the Real Estate Investing world in that we do not do information product sales. Our content rich meetings focus on Real Estate Investing via collaboration with like-minded Real Estate Investors sharing their own experiences.
The SWFL REIA is on the cutting edge of data gathering and analysis of the housing market and foreclosures. Our Analysis and Trend reporting has made the SWFL REIA an expert source for the media and set standards by which the housing market is analyzed and trended within the industry.
Our members are Real Estate Investors, Real Estate Agents, Title Agents, Insurance Agents, Landlords, Property Managers, Wholesalers, Rehabbers, Note Buyers, Hedge Fund Managers, Bulk Asset Purchasers, Foreclosure and Probate Investors. Come and network!
Our Motto: Knowledge withheld is Knowledge wasted.
The number one key to being successful in real estate investing is?
To understand what you are there to do!
From our experience, this is the most critical phase. If you have a clear plan it is easier to deploy capital while still operating within a margin of safety.
The SWFL REIA is the premier place to understand what you are here to do, in relation to real estate investing! We look forward to meeting you at a meeting soon!