Investing in real estate is the best way for most of us to reach our financial goals. It’s the most profitable investment path available to the average American. By gradually building your real estate portfolio, you are guaranteeing your family financial security for their lifetime. And one of the best times to be buying real estate for the long-term is right now. But before you jump the gun, take it from someone who knows a lot about this business, there are a few things you need to understand about investing in real estate.

1. Know how to value a property. Perhaps the biggest mistake made by people starting out in real estate investing is not getting the valuation of a property right. If you are too low in your estimation of a property’s value, you probably won’t get your bid selected. Conversely, if you are too high in your valuation, you may end up with a property that won’t break even as a rental. It also will take longer to appreciate in value to the point where you purchased it. Solving the valuation puzzle takes a lot of research, some experience in doing it, and sometimes a bit of luck too!
2. Understand your investment criteria. Before you begin looking at potential real estate investment properties, you need to know what you’re looking for. Do you want a rental that will generate an income stream? Are you a buy-and-hold investor? Do you want to buy a property to flip it and make a quick buck? These are all questions that you need to ask prior to even beginning your search. Knowing your investment criteria will eliminate the time wasted looking at properties that ultimately aren’t for you – and improve your chances of finding only the right ones.
3. Get advice from an expert.  Especially when you are starting out, or maybe just looking in an area you are unfamiliar with, consider getting advice from someone who knows the market you are interested in. A Realtor can be a valuable resource, especially if you already have a trusted relationship with them. Another source may be a real estate consultant that knows the area. Many people that are highly knowledgeable in real estate investing have turned to consulting or “birddogging” as a way to supplement their incomes.
4.  Financing.  Understanding financing options makes finding potential real estate investments that much easier. There are many ways to obtain financing that are different from the conventional sources. If an owner is willing to carry paper, you may get better terms from them. In the case of a homeowner who is in default, he may be willing to consider a “subject to” sale, where you assume the existing loan. You may also consider investment sources for potential financing.
5.   Know the current market conditions. It may seem like a no-brainer, but the condition of the real estate market determines who is in the best negotiating position for most deals. Is there an over-supply of properties on the market, or are they getting snapped up as soon as they come available? Knowing this will help you in structuring your bids. If most of the properties you are interested in are selling in hours or days, you will want to place the highest bid possible – the sellers are in control. However, if a property is on the market for months, you may be in a position of strength.

For a one-on-one consultation on whether or not being a real estate investor is right for you, request an Investing Aptitude Assessment from StreetWise Property Investing.  Get it here: http://StreetWisePropertyInvesting.com/Assessment.