Many people get into real estate investment wondering if they will instantly strike it rich. This is seldom the case. There is much more work that goes into successful investment growth. In our latest post, we will explore ways to accelerate and amplify your real estate investment success.
Real estate investment is a great way to bring additional income to you and your family. The trick is not only to find great investments but to find investment opportunities that provide sustainable growth. You don’t want to invest your money somewhere that has the potential to lose all of its value overnight. Sioux Falls, and South Dakota in general, is a great place to start your investment journey! Keep reading to learn some great tips to secure sustainable investment growth!
5 Tips for Sustainable Investment Growth in SD
Tip #1: Know You Are Running A Business
When you venture into the world of investing you are in all reality, building a business for yourself. It should be treated as such. You should dedicate time to your work and deal with people in a fair and consistent manner. Focus on your job at hand and don’t get caught up in distractions. Sometimes, you have to rely on your head over your heart when it comes to investing, and this isn’t always easy for newbie investors to manage. In real estate investing, time really is money. Market prices can fluctuate quickly. In the current market, things have seemingly gone from the hottest market of all time, to now a perilous, not so flashy market full of doubt and concern. When working your numbers, take into consideration changing market conditions and a “Worst Case” scenario. Now more than ever, you will want to be able to swoop up great deals as they become available and unload properties you want to flip in a timely manner. The longer you hold a property, the more it will cost in the long run!
Tip #2: Have a Plan
Just like any successful business, you should have a business plan. This will help you create goals along with actionable steps to get you there. Ask yourself these questions:
- How many properties do you want to own?
- What types of properties do you see yourself investing in? Single-family? Multi-family? Commercial?
- Will you require the help of a property management company? If so, start interviewing them or reading reviews about each one. You should take into account what type of property you are trying to invest in, and see which company fills those needs.
- What locations will you consider investing in? Start small, picking a specific location within Sioux Falls, and then using a small radius from there.
- What is your price range? If you will need to pay with a loan, talk with your banker to see how much you can afford.
- What size property are you after?
- Do you want to buy and hold or go for the quick flip?
- What is your exit strategy? AKA- What amount or percentage do you want to make? How much work will it take to get there and how long will it take?
- Are there other partners involved? How are profits divided?
You should have clear answers to all of these questions with as much thought put into it as possible.
Tip #3: Build Your Winning Team
Once you begin your investing journey, you are bound to meet lots of professional along the way who can help you. It is important to foster and nurture these relationships so you can find the professional YOU want to work with. On your team, there should be an agent you turn to when the situation arises. A lawyer whom you consult with on all deals. An accountant who keeps all of your books in order. A lender who will be there with the funds when you need them. And a Title Company where you can close the properties at. By surrounding yourself with a team of people you can trust (and enjoy working with) will streamline your processes and make things much easier for you!
Tip #4: Find A Mentor
Building a relationship with someone who has been in your shoes can be vital to your success. Your mentor should help keep you motivated, provide you with advice on potential purchases, and help you avoid making costly mistakes. You will learn more from someone who has done it all than you would in any book. The last thing anyone would want is to make a decision that sets their Sioux Falls investing career back. Find a mentor, build the relationship, and start changing lives.
Tip #5: Don’t Be Afraid To Stay Off The MLS
Some of the best investment deals are found off the MLS. Many are “For Sale By Owner” properties you can find at a great price. Look to work with private owners and utilize other real estate websites in your search. People sell for all sorts of reasons, and sometimes their reason for not listing is because they’ve had a bad experience with a realtor. These situations provide a win-win because not only does the Seller not have to pay 6% commissions, but the buyer saves money not buying at a 6% premium.