Stefany Blount

So, You Want To Be A Real Estate Investor?

In this new market, I seem to be getting calls left and right from people who want to jump into the Real Estate Investment game. It's not for the faint of heart. If you were smart with your money and managed to maintain a strong level of liquidity in these times, you are in a good position to obtain a great investment property.

Here are just a few things to think about to get you started.

Ownership may have it's privileges but it's not without a little elbow grease.

Proper management of your property is one of the most important details. If you are not going to be a hands-on landlord, the choice of a good manager can make or break your investment. This is a big concern for our foreign buyers who don't always see the properties they purchase. Accounting, maintenance and securing good tenants is a full time job.

Who's liability is it anyway?

Single owners or partners who choose to buy a property, should understand and implement liability protection. The most widely used method of reducing personal liability between partners is the creation of an LLC. Limited Liability Company. Think of it as a corporate partnership with added flexibility. Friends with benefits, one might say!

For those who are comfortable with legal terminology, you can form your own LLC without using a lawyer and save quite a bit of investment cash. I personally have found success using Nolo.com The guides and CD's are easy to use and many come with all the government forms required to get you started.

See detailed explanation of LLC's:Wikipedia

What do you want out of your investment?

Do you like to date or can you commit? Many people are lured into investing by the siren song of buying cheap and flipping for huge gains. Have back-up positions! Your short-term buy may become your long-term property. In todays market, think income producing studios and 1 bedrooms. In a good market, you can always sell with the tenant to long term investor seeking property with immediate income potential.

In a nutshell, be prepared. If you cannot afford to carry the investment in a bad market, wait. Good and bad markets are cyclical. Your time will come again and you will be prepared to act. Don't sacrifice your good credit or your liquidity by ultimatley end up on the foreclosure chopping block.

Now What?

You have the first solid layer of your foundation. My future posts will build on that foundation and delve deeper into the intricacies of choosing a property that is right for you, analyzing your current and future cash flow, and how to be a successful investor in the long run.

Should you have questions not addressed in this post, email or call me!

Happy Investing!