It gets brought up all the time about someones success in real estate and how much money that person made on the last deal. I am told to “find a deal” and send it to people or told to keep an eye out for a great opportunity and over and over again the conversation always leads back to you have to be buying and selling to make money in real estate.
Nobody makes a profit in real estate by being on the sidelines or over thinking an investment, that is what makes the money – the risk. They see an opportunity and leverage their money, skills and relationships to take advantage of a distressed property or a building they can clean up and add value to. Its not about talking themselves out of a deal but figuring out why they have a better chance at making money on something then anyone else that has looked at it. Yes they walk from deals but that is not the goal. The goal is to walk into a deal, see an upside and make some money. They are always buying and investing.
The other side is selling. Real estate investors are always selling what they buy to make a profit if they are not keeping it in their portfolio as cash flow. Selling a property for a profit at the right time is key to creating one of the great turn around stories of your own. Yes buying is the first place you make the money but selling and realizing a nice return in the best timeframe is awesome. Thats what people talk about. Thats what gets the juices flowing and is exactly why people get hooked on investing in real estate. This gets repeated over and over again and some lose and some win but nobody creates their awesome story by hesitating to step in and let someone else make the deal. So below are a few suggestions when you start thinking about investing in real estate. They come from helping buyers buy and sellers sell over and over again in a very profitable industry. We would love to discuss how these suggestions work into your taste for investment and how we can help you make lots of money buying and selling real estate.
- Start Small – There is nothing wrong with investing in a house or 1000 sqft office building. It is scary and biting off more then you can chew is a bad mistake. I have witnessed broke investors trying to unsuccessfully flip a million dollar property and wealthy people making a nice return on starter homes. Its about making money not retiring tomorrow so figure out what your bank will lend you and what cash you can use without it changing your life and start with that. There is nothing cooler to me then a person buying a beat up house, cleaning it up and making $20,000 in a couple months. Its not getting rich but it can be easy smart money.
- Learn to take risk – You can never sell for a profit if you don’t buy. Look at properties and figure out a best case scenario and go with it. If you can buy it for a certain amount, you buy it because you have the skills and drive to improve it and sell it for a decent return. Don’t be dumb in this and be sure to do your research but figuring out a “no brainer” purchase price because you see an opportunity is key. Take that risk and try it because you have done your homework and figured out the price you will buy it for will not bury you and in a worse case scenario will cover its cost and appreciate. It can really be that simple.
- Buy Buildings – Investing in land is the greatest return but the highest risk. For land to be an easy investment, someone else has to want it more then you quickly because there is little income from land. With a building you have much higher odds of being able to generate revenue and it covering itself. The other side is improving a beat up building is less expensive then developing a building. New bathrooms, flooring and walls make alot more sense and can cost less then the initial site development plan fees. You buy a building that needs cleaned up, you clean it up, you lease it or you sell it for nice cash flow or a profit at closing. But buying a structure is much less risk then a vacant piece of ground every time.
- Get Advice – Find a mentor that has done just this and ask them for advice and suggestion. The best investors have the best advice and will share lessons learned over the years. If you know someone that has bought a few buildings and done just what we have discussed, take them to coffee and tell them your goals and ask them to share their experience. They will appreciate it and possibly save you alot of time and money early on.
I do not think buying and selling real estate is for everyone and its easy to get upside down real quick if you do not do your research but one thing never changes. Anyone making money is real estate is always buying and selling and leveraging their skillset and resources to make a little money over and over again. Glad to help.
Curt has been in the Indianapolis Real Estate business for over 10 years and spent his first years learning all aspects of commercial management and brokerage. He has had great success in managing existing commercial projects and new retail and office developments. Curt specializes in building owner representation and purchases in the Westfield Indiana market as well throughout the Indianapolis Metro area. Curt is passionate about growing the local Westfield community and in his free time volunteers with Westfield Youth Assistance and raising 2 children with his wife Jennifer.
