5 Common Real Estate Questions New Investors Ask
When I was first entering the world of real estate, I was full of questions. Of course I was able to find most of the answers online or via in-person real estate events (pre-covid, of course). However, I never got the kind of clarity I wanted until I actually started putting in the work. Still, I think it would’ve been helpful to have the most common questions answered all in one place. That’s why I’ve put together this brief list of common questions I keep hearing every day, whether it is from my new students or people who are just looking to get started with real estate or mentorship.
#1 How do I find a profitable investment property?
There’s one question everyone always asks right off the bat and it’s how to find a profitable investment property? There is no doubt that you need to learn the right property sourcing strategies to be successful in this field. You won’t just stumble across a good property out of nowhere. Finding these gems is complex and time-consuming. What you need to do is look for off-market properties where sellers are motivated to sell quickly and hence are ready to give you discounts. Keep in mind that these kinds of properties are usually in a not so great condition, meaning you’ll have to do renos before making any money back. However, that’s exactly what you need when purchasing your first income property - some room to increase property value. Now that you know what kind of properties to look for, focus on market analysis and research to find a good opportunity.
#2 How do I determine the value of an investment property?
This question usually follows the first one. In order to predict whether an investment is worth your time, you need to understand how property value works and how it can be calculated. There are many ways you can do this, including hiring a professional to take a look at the property. However, the most common way of determining value is through comparative market analysis. This includes diving deep into the market and examining similar properties that recently sold in the same area. These properties are called real estate comparatives or comps for short. Keep in mind that you might need help from an investor-friendly realtor to access the deeper levels of market data.
#3 What is the best real estate investment strategy for me?
Over the years I’ve spent investing in real estate and mentoring new investors, I’ve connected with thousands of people via social media. I can’t even count how many have asked me this question. To be honest, I can’t tell you exactly what the best strategy for you is unless I know your current situation (financial and goal-wise). If you want me to be specific and suggest a strategy that is the best fit for your financial situation, you can book a free call with me and have a chat about it. However, what I can tell you is that by far the best strategy both for new and experienced investors is the BRRRR strategy. I know this because I’ve used it over and over again, I’m still using it, and my students are using it successfully as well.
#4 Can I begin investing in real estate with no money?
The number one obstacle new investors face is financing. Sadly, many people give up on their real estate dreams because they don’t have the capital to get started. In reality, you don’t need to have a ton of cash on your hands to start dabbling in real estate. The alternative option is to invest with other people’s money through joint ventures and partnerships. It’s simple - all you have to do is find a partner who is willing to put in the capital while you dedicate time, knowledge, and hard work to the project. If you’re not keen on real estate partnerships, you can consider other options such as hard money or private money loans, as well as seller financing.
#5 How can I learn about real estate investing?
The truth is, real estate investing is a very broad field and trying to find your answers on Google is equivalent to trying to catch one specific kind of fish in an entire ocean. You just won’t get far (or at least not so quickly). My number one advice when it comes to starting real estate investing is get help. Get help from someone who’s done it or better yet, someone who is doing it consistently. Having the right guidance makes the difference between success and early failure.