Work on your credit score
Investing in real estate takes time, unless of course you are the heir to a hedge or trust fund. For the average person there are steps that need to be taken in order to be set up for the best possible outcome. When it comes to hard money loans, your credit score is not as important as it may be when applying for a traditional loan. Hard money lenders generally look at the value of a property and not the borrower’s finances or credit. With that said, paying off all of your debts and having a solid credit score will give you a leg up on the competition.
Successful investors know that saving money is critical when planning to make a big purchase. Having proof that you are a consistent saver will help when the time comes to find a lender. Saving money teaches one the value of money and the practice of self-restraint. If you have debts, focus on paying off high interest debts first, pay a little more than the minimum balance due and only spend money on the essential items that you need. Paying off loans is paramount if you are to obtain a real estate investment.
Don’t indulge in self-doubt
Never let the fear of failure get in your way. Everyone starts somewhere. Everyone learns as they go. Failure is a part of life and is also a big part of investing. There are always risks involved in life and in investments. Do the research, do your due diligence to help make calculated moves that will help minimize your risk. If you make a mistake, don’t beat yourself up. Instead, learn from the situation and try to improve yourself and your understanding for the next go around. The important thing is to never give up.
“It’s not what you do, it’s who you know.” Have you ever heard of that saying? Getting to know the right people is important. Meeting with real estate agents, contractors and other investors will help you understand the industry and how it works. You will definitely make important contacts along the way so keep your eyes open. When you invest in real estate you should aspire to have a solid team of people who you can rely on. Stay up to date on the market as it can change in a heartbeat.
Follow the numbers
It’s easy to get caught up in making emotional decisions. However, when investing in real estate thinking with your heart and not your head can turn out to be a terrible mistake. A property may look perfect on the surface but may also not be up to standards. Seeking professional advice is always the smart move when it comes to purchasing a property. You will need to find out if the property is worth the money, time and effort. There are plenty of things beneath the surface of a property that may make the investment not worth it. Investments are not about gut feelings, they are about the numbers and if you can net a profit.
The bottom line is this: Pay off outstanding debts, save money, study the market and seek professional advice before getting yourself into a contract. A real estate investment can be one of the best ways to earn income.
"Landlords grow rich in their sleep without working, risking or economizing" – John Stuart Mill