The Next Level of Your Investing Career: Investment Property Companies
Being a real estate investor is a job of its own, and there is never really a limit. There is really no such thing as “too much investing” in this type of business. On your road to making money in real estate, you will find that there is always room to expand what you’re doing. That is where investment property companies come in.
Starting a real estate investment company could be your next big step as someone investing in real estate. An experienced investor could want to go bigger, go harder. A beginner real estate investor may come to the real estate feast hungry and ambitious and want to start big right away. Whatever the case, they have something in common: they want to start a real estate investing business.
Making the decision to explore investment property companies is a courageous one, and we salute you for taking it. Mashvisor plans to give you the push you need by providing you with the steps to start this new journey. Now, we give you the recipe for starting investment property companies and all the nitty-gritty details. Let’s start cooking.
First Things First: What are Investment Property Companies?
Investment property companies exist to do one thing: invest. Starting a real estate investment company means you will be handling, you guessed it, real estate investors’ investment money. This investment money comes from your clients that want your investment property company’s services. Your main responsibility is to sell, manage, and market funds to the public.
You can offer your clients a variety of funds and investment services. This can range anywhere from investment property portfolio management to recordkeeping. Or even custodial, legal, accounting, and tax management services. The more diverse you are as a real estate investment company, the wider your pool of clients, who are other real estate investors you can fish in.
Reason Behind Why Investment Property Companies Function
Why do investment property companies even exist? The reality of it is, some investors out there have the drive to make money in real estate but might not have the strong skill set. Others may lack an investment property business plan, or just generally do not know where to start. This is where your investment company comes to the rescue.
You are superman in other real estate investors’ eyes, and they go to your investment property company to save their real estate day. Your investment property company will provide a platform with intelligent individuals who have real estate investing in their blood. You and your “side heroes” make up the team of success.
Most real estate investors would look to investment property companies to gain access to a wider range of investments they normally could not buy themselves. They trust their money in your expert fund manager’s hand, and they trust you will not disappoint in bringing in the cash. Which you won’t, as Mashvisor is by your side and you have the eye of the tiger in real estate.
How To Start Investment Property Companies
The Process Broken Down
When you’re looking at how to make money in real estate, preparation is one of the most crucial steps. This is the game plan for your investment company. You need strong fundamentals to get a strong investment property company in return. This is the preparation stage of something as complex as an investment strategy or as simple as coming up with investment property company names.
Choose the Investment Strategy
Figuring out which of the investment strategies you want to use is important in drawing out what legal issues you will need to consider and even which type of business entity will be best to protect your targets. Basically, this is where the decisions are made. This could be choosing your investing focus, whether it be long-term properties or quick property trades. Or something more small scale like purchasing single or multi-unit properties.
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Devise Your Investment Property Business Plan
Here, you draw out your blueprints of the company. Here, you determine how much money is needed to start, how you plan to fund the company, the potential profit and so on. Include your marketing plan, the types of clients you plan to target, and your goals and objectives. Having the best real estate strategies lined out helps you devise how to go about starting your company.
Property + Insurance = Smart Move
This is where construction starts. You’re starting to build your investment property company from the ground up, literally. Search for a suitable location and property to develop your company. Insure it, because you never know what can happen to your precious property.
Related: How To Find An Investment Property Using Analytics
Legal Set Up is Your Armor
The legal set up includes your business’s entity along with its registration. Most investment property companies are set up as LLCs. Choosing this type of business allows you to legally separate yourself from liability. This protects your personal property and finances from catastrophic failure (such as lawsuits).
Fill out the articles of incorporation with state agencies and maintain a “good standing” business. Also, register with the Securities and Exchange Commission as investment companies are required to register with the SEC. Simple as 123.
Related: Should You Form an LLC for your Investment Property?
Funding: You Need the Green
You need to take into account how you’re going to fund your investment property company. Money is what makes the real estate world go round, and what will get your project moving. No money means no property purchase, no ability to hire employees, and no investment company. You need the green. There are a number of different ways to get your property financed, such as:
- Private Investors
This is seen as one of the best ways to raise capital for your new real estate venture. Make sure you conform to the guidelines set by the SEC or the equivalent in your state.
- Online Crowdfunding
This method still carries the burdens of the SEC, but it allows you to source your funding from a much wider pool of investors using digital platforms, making the fundraising process that much easier. You can find a number of real estate crowdfunding websites that can provide you that digital platform.
- Small Business Loans
If you aim to avoid dealing with financial regulators, you can also secure a small business loan.
Find Your A-Team
This is a bit of a no-brainer, but you’re going to need to find employees for your company. Investment managers, investment property analysts (this is where you hire Mashvisor by the way), sales associates, you name it; they’re all needed for your company. Find the individuals that have the same drive and vision that you do. Seeing eye to eye with your team is a plus you want to aim for.
UTilize Mashvisor
What aspect of real estate is your company going to focus on? Choosing residential real estate management means you get to use Mashvisor as one of your real estate investing tools. You’re out to find the best investment property assets to distribute amongst your real estate investors. Using Mashvisor, you can view many of those important real estate metrics that are normally used to evaluate a rental property.
Related: How to Buy a Rental Property Using Mashvisor
You’re hunting for income generating properties, so cash flow, cap rate, cash on cash return, and return on property investment all need to be accounted for. Mashvisor’s product is here just for all that and more. You can even explore the investment property calculator for a quick and easy analysis. Real estate property analysis is pivotal for your search, so don’t pass up on Mashvisor.
How’s the Money Made in Investment Property Companies?
Real estate investors will be paying you for your service. You charge a fee that is typically a percentage of the assets you manage. This is something around 1%, give or take depending on the type of fund. Some investment property companies even get a percentage of the profits (something like 20%) of what their clients make. Which way you want to go about your fee goes back to you, so explore the ways to keep both you and your client happy.
The ticket to making money from investment property companies is getting a lot of assets under your management. The more assets under your control, the more investment properties you can sell to other real estate investors. A strong team making up your firm is crucial to your success.
Investment management is definitely a scalable business. You can find yourself doubling the size of your assets from one billion dollars to two billion dollars, doubling your revenue. Then go to see your costs change and notice a tiny amount or nothing at all. Again, a scalable business.
Is This the Next Phase of Your Real Estate Investing Career?
You always want to aim to grow as a real estate investor. No matter what you plan, you are going to look for the most effective investment strategy, the best real estate investing tools, and the best investment opportunities. Investment property companies could be a new investment opportunity for you. If you want a shift in the real estate business, this is always an option to explore.
Investing for the long term is the base plan, so grow from there and expand as you go. “Save and invest” can be considered a real estate investor mantra, because that is what you commit your life to! No matter how much you save and what you choose to invest in, you will be on the path to success, especially with Mashvisor.
