Building an Empire: How to Become a Success in Real Estate
It’s well-known that real estate investment is one of the best and most proven ways to build wealth through both cash flow and equity. Becoming successful in real estate, however, takes time, patience, dedication and the right plan. Here are a few of the top tips for the beginning investor who wants to build his or her real estate empire.
Balance Flipping and Rental Properties
In real estate investment, there are two basic ways to make money. The first is to realize a large sum by buying a property, improving it in some way and then reselling it for a higher price. The second method is to create a flow of passive income by acquiring and then renting out properties. Though both of these are great ways to make money in real estate, truly successful investors typically include both in their businesses. By flipping and renting at the same time, you will be able to create a more stable financial situation for yourself and your business.
Create a Strong Real Estate Team
Though it is possible to have some success in real estate as a one-person business, you’ll eventually need to build a team around yourself in order to scale up. Your team of people can include direct employees to find and negotiate property sales for you, as well as well-liked contractors to handle repairs on the properties you acquire. Over time, your goal should be to take yourself out of the day-to-day tasks of your business as much as possible. By surrounding yourself with talented and driven people, you will be able to focus in on only the most important aspects of your real estate investment business.
Like any other business, networking is key to success in real estate investment. If you want to find listings of other investors, venture capitalists and hard money lenders, use CrunchBase. CrunchBase acts as a full-service database of these professionals and their investment histories. Although CrunchBase is not specifically intended to connect professionals, many investors listed on the database choose to display their websites or contact information, creating potential networking opportunities for you as an investor.
Branch Out Geographically
When you first start investing in real estate, it’s a good idea to stick to your local area because you are familiar with it and will be able to more easily manage properties that are close to you. As your business develops, however, you may find yourself needing to expand into other nearby towns and cities. Breaking into new markets can offer you new property opportunities to support your growing real estate empire.
Consider Apartment Buildings
Once your real estate business has reached a certain level of success, it may be practical for you to think about owning an apartment building or complex. Though the initial costs are quite high, buying an apartment building can pay off by supplying a large and steady stream of monthly income. If you want to go this route, make sure you have a staff in place that can take over management of the apartment complex you purchase. Even if it is your largest single investment, you don’t want your apartment building taking you away from other aspects of your business.
Finding success in real estate will be a long process, but with the right plan and the right growth mentality, you will be able to replicate the successes of others who have built wealth in real estate. Remember to structure your business so that it can scale smoothly and easily, as you will want to realize continuously larger profits.