The real estate market is highly competitive, and to make an impact, you need to stand out from the rest of the crowd. Regardless of whether you’re a developer
What should most investors know about real estate that they do not know?
Most investors should know that investing in real estate is time consuming. To invest in RE w/o being willing to take the time to really understand the micro-market your purchasing in, as well as the pros/cons of the type of property and the trends affecting it are recipes for disaster. For example, there is a general consensus that retail has been overbuilt. That is especially true in older markets with cheaper prices. In Commercial property, the higher capital costs at turnover and longer vacancies can bankrupt a small investor. Hence, most investors start with residential because they are under the illusion they understand it – because they own their own home. However, most investors are not buying, remodeling and selling or renting where they live. The difference in the markets must be understood.
The next key area of failure is doing things too cheaply – and paying far more in maintenance costs on a rental, or upgrading too much on a property for sale, leaving to little for profit.
The final area that investors need to know more about and typically don’t is how to set up business process for their business. Not treating it like a business, with the same seriousness and attention to detail ends up creating financial issues with local municipalities or the IRS. Additionally, as some point, Building Inspectors, Health Inspectors and local fair housing groups start to notice the lack of professionalism, and then trouble really builds.
By attending net working sessions and asking other investors, what their “aha” moment was in becoming successful, may be interesting, but asking them what they realized they didn’t know, may be much more helpful.
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