Starting Real Estate Investing

Copyright (c) 2011 Jack Bosch

So you want to start investing in real estate?

When I began investing in real estate nine years ago, I never imagined where it would take me. It allowed me to eventually quit my day job and become my own boss. While my own experience won't apply to everyone, I've learned a lot about the dos and don'ts - sometimes the hard way.

So what would I say to someone just starting real estate investing right now? Well, what kind of investing do you want to get into? The housing market is very strange right now. Depending on your area, residential real estate can still be risky. In some parts of the country, the market seems to be coming back and in others, we seem to be digging in for a longer drought.

My personal advice to new investors is to make sure that they really want to get into investing in residential real estate. First of all, for most people, depending on your financial situation, buying an investment property means dealing with a bank. And from everything I'm reading and hearing from colleagues banks are still reluctant to lend and harder to deal with than ever.

But securing financing is just one hurdle when considering whether to purchase an investment property. Do you plan to rent out your property? How is the rental market in your area? Will you be able to get a good rental rate to cover both your mortgage and any on-going maintenance you might have to do? If you've never been a landlord before, are you ready to be a handyman? If not, get one on your speed dial!

Personally, my strategy has been to avoid investment opportunities that required I take on too much debt (another mortgage or two) and required that I deal with banks - or required that I have to deal with renters.

What changed things for me was when I began buying and selling land. I found there were opportunities for a new investor like myself to enter the market without 1) being a millionaire, 2) having to take loans or deal with banks and 3) not have to deal with renters or contractors. I found parcels of land that were usually undeveloped (no fixer-uppers for me!) and I eventually learned a system for figuring out which land properties could be had for just a fraction of what they were actually worth. So I kept my investments small and gradually these small deals paved the way for a profitable strategy that I continue to use today.

Not all of us are cut out for fixing up houses and flipping them. Or for taking on extra mortgages which we don't know if we can really afforded (if things don't pan out exactly right.) Remember, it's never a good deal if you're risking financial disaster. Know your risk level before you decide what kind of investing to pursue.


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