“How to become a real estate investor?” That is a question that more people are asking than ever before. Most people, however, find themselves intimidated by the idea of becoming real estate investors due to their lack of knowledge of the real estate business.
Before you ask yourself “How to become a real estate investor?”, you should first ask yourself “How willing am I to commit to the process of becoming a real estate investor?”
There are too many things related to becoming a real estate investor to be included in one blog. We will try, however, to include the general aspects that you will need to learn about before you become a real estate investor, and we will conclude the blog by telling you about a secret weapon that you can use in order to compete in the real estate market, one that, once used correctly, might lead you to earn your first 7-digit check within a short amount of time.
How to Become a Real Estate Investor: Education Is Key
The very first step that you will want to take in order to become a real estate investor is to arm yourself with knowledge about all the different aspects of real estate investing. Although becoming a real estate investor does not necessarily require you to have a college degree in real estate or any related field in most cases, no real estate investor is able to make it into the market and achieve success without having sufficient knowledge of the real estate business.
So, before you rush into the market with nothing but your ambition and desire to invest and make money, you need to make sure that you’ve learned (through various available sources such as books, blogs, guides, and podcasts) the ins and outs of the real estate business.
This education should include the different aspects of real estate investing such as:
- Understanding the different types of real estate properties
- Understanding the different types of real estate investments
- Understanding the process of real estate investing
- Understanding the legal aspects associated with real estate investing
- Understanding the financial aspects of real estate and how to acquire financing for your investments
- Understanding the housing market and the competition
How to Become a Real Estate Investor: Finding Investment Properties
After acquiring sufficient knowledge to get you started in real estate investing, your next step is to learn how to find the best investment properties. The process of finding an investment property for your investment requires skills, patience, and an analytical mind.
During your property search, you will come across several properties that might seem like great investment opportunities on the surface. However, having 50 property choices that all seem too good to be true probably means that they are too good to be true. So, how do you decide on a few properties that you are sure would be appropriate for your investment purposes? This is where your acquired knowledge comes knocking on the door.
In order to determine which the best investment property options for your investment are, you will need to conduct an investment property analysis to determine the profitability and value of each property, and you will need to compare them in order to distinguish your best options from the mediocre ones.
So, how to become a real estate investor? Learn how to find an investment property.
How to Become a Real Estate Investor: Market Analysis
Real estate market analysis is one of the most important steps to any real estate investment. A real estate market analysis allows you to determine the best properties to invest in and to calculate and accurately predict the profitability of each property before you even invest in it. Additionally, market analysis allows you to pick between multiple similar properties based on factual information about each property in order to determine which of these properties is most suitable for your individual investment.
Before you ask yourself “How to become a real estate investor?”, you will need to be able to understand clearly the different aspects and metrics that are used to calculate the finances related to your property investment, and more importantly, you will need to understand the meaning of these three metrics:
- Cash Flow (NOI – (Expenses + Mortgage Payments))
- Cap Rate (NOI / Property Value)
- Cash on Cash Return (Before-Tax Cash Flow / Cash Invested)
Of course, in addition to understanding these crucial metrics, and in order to be able to calculate them, you will also need to learn the different expenses that should be accounted for in your calculations in order to get accurate results and avoid getting hit by unexpected costs that might throw your investment off the ledge.
These expenses include but are not limited to the following:
- Repair costs
- Vacancy Rate
(Vacancy Rate is another important metric that should be included in your calculations. It should be noted, though, that Vacancy Rate is a metric that is only used for rental properties, and it expresses the amount of time that the property is expected to be vacant during the year. This value is expressed as a percentage of the property’s annual income.)
So, how to become a real estate investor? Learn to do real estate market analysis.
How to Become a Real Estate Investor: Use Mashvisor
Before you quit, you should know that although the process of becoming a real estate investor might seem too daunting and requiring too much effort, there is a way for you to make it all easier, faster, and more effortless than ever before.
Mashvisor is an online platform that allows both beginner and experienced real estate investors to carry out their real estate investments more efficiently than ever before. Not only does Mashvisor act as a hub for real estate knowledge, with a blog section that includes hundreds of how-to blogs and guides and several other useful types of blogs, allowing beginner investors to find everything they need to learn about real estate in one place, but it also provides users with a number of real estate investing tools that can help them with the processes of finding investment properties and conducting real estate market analysis in order to make the best property investments.
The platform includes an investment property finder function which can help investors search for investment properties in specific areas and based on specific metrics or search criteria.
But that’s not all…
The tool includes a heat map function to allow the user to compare different areas or properties, based on specific search criteria.
Additionally, Mashvisor provides you with a detailed analysis of potential investment properties based on real estate comps and provides you with both quantitative and qualitative data to help you make your investment decisions.
Basically, Mashvisor can help you become a real estate investor by providing you with the required knowledge, finding the best investment properties for you, and providing you with real estate market analysis for your investment, saving you months worth of research and market analysis, and helping you make the optimal investment decisions.
So, how to become a real estate investor? Use Mashvisor.