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Successful people know its value investment. There are many ways to become extremely wealthy in life, but few people have the same track record Investing in real estate. Real estate investment is one of the best wealth generators in the world. There are arguably more millionaires in the field of real estate than any other business category. So what is a “real estate investor” and how can you become one?
The term “real estate investor” often refers to individuals and businesses that buy, sell, and renovate homes. However, you don’t have to be Professional house flipper Has the title of real estate investor. Anyone in any industry who actively chooses real estate as an investment option is a real estate investor. Some individuals choose real estate as an alternative to stocks, bonds, and mutual funds, and others do not Add real estate in their existing investment portfolio. The question is often asked: Is it available to everyone?
Here are three of the most common misconceptions about investing in real estate.
Related: 10 Reasons Why Every Entrepreneur Should Invest in Real Estate
You have to be rich to invest in real estate
When most people think of real estate investing, they think of mega-rich celebrities and their huge real estate portfolios. Just because you don’t drive a Lamborghini or draw a salary from a multi-million dollar trust fund doesn’t mean you can’t invest in real estate. There are countless ways to start investing that require very little Out-of-pocket expenses.
Traditional wholesaling and joint ventures are just a few methods that require little or no capital. Hard work and dedication are really necessary to become a very successful real estate investor. With the right techniques, you can flip your first property for very little money and maybe even without spending a dime.
You need good credit to finance real estate deals
If you are applying for a conventional bank loan, you will need an adequate credit score for the approval process. However, there are various other ways to secure financing for your real estate investments. Let’s take a look at two of the most common financing options that don’t require credit approval.
Transactional Funding aka Flash Funding
Transactional funding is a Short Term Loans Which in most cases are borrowed and repaid within 24 hours. This type of financing is common during two-to-back double closings. It allows an investor to secure the A to B side of a real estate transaction. Then, once the investment is secured, the investor can sell the property from B to C side. After they collect the funds from that closing, they immediately pay back the initial flash fund loan. In most cases these loans are secured by the property purchased and not by the investor.
Hard money lending
Hard money financing is another popular strategy used by real estate investors to obtain investment. This type of loan is known as A Bridge Loan. It is a short-term loan that allows an investor to purchase a property without the lengthy application or approval process required from traditional banks. Hard money loans are asset-based, which means they are not contingent on the creditworthiness of the investor. They are typically used in rehabilitation projects where an investor buys a property at a discount, then remodels the home and resells it at a profit, at which point they repay the loan. These loans rarely exceed a 24-month tenure.
Related: 3 Ways Entrepreneurs Can Save on Real Estate Costs
Investing in real estate requires experience
The fact that you have never invested in real estate should not stop you from investing. A little research can go a long way. Experience is gained through actions. After all, to be an experienced driver, you have to drive. That doesn’t mean you should get into a sports car and hit the race track. That means you start with driving around your neighborhood, your town, city, highway, and eventually the interstate. It is no different from real estate investing. Your first foray into investing shouldn’t be a 500-room condominium with a 60-page purchase agreement. It should be an affordable single-family home in an area you are familiar with.
There is no question that you can start investing without any prior knowledge or experience. However, if you want to fast-track your learning curve, you may want to enlist the help of an experienced professional as a mentor. A successful investor can teach you what to do but more importantly what not to do. Being able to bypass costly rookie mistakes is a huge advantage and will increase your chances of success. Many successful business professionals have mentors and real estate is no different. Just make sure you do your research to make sure you’re getting advice from one A qualified consultant With years of real estate investment experience.
conclusion
There’s a reason so many people turn to real estate as a vehicle to generate wealth. Simply put, it works. Don’t be discouraged by misinformation and myths about what it takes to get started. The only thing stopping you from becoming a real estate investor is you. Warren Buffett, one of the world’s most famous investors, once said, “Be sure of your success, even if no one else is“. Don’t delay, do your research and start your journey.
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