Tips for New Real Estate Entrepreneurs from Stratton Equities | Think Realty
Without a doubt, the rise of social media has increased the online presence and seeming ubiquity of successful real estate investors across the country. However, that doesn’t mean that all real estate investment advice online is legitimate. In reality, these investments cannot be rushed, there is no such thing as a “silver bullet” that beats a systematic approach, and most new investors do not make a profit.
What real estate entrepreneurs and first-time investors need to know
Below are the top 3 tips I recommend for newbies to real estate investing:
Tip 1: You need good credit and cash
First-time investors and property start-ups in particular should aim to be valued investors. That means your credit is good and you have enough cash to work with.
As a seasoned private moneylender, I have identified certain trends that are best avoided. For example, when ambitious new investors suffer from bad credit, they often fail to focus their energies on solving the problem. Instead, they waste 10x more time trying to find a workaround – which in the end never works.
Tip 2: You need to build a team
As a first-time real estate investor, expanding your network is critical. To be a successful real estate entrepreneur, you must have experience yourself or work with someone who does.
Going headlong into a real estate investment with no experience can be incredibly overwhelming. Instead, go in with someone who has been through the process before to learn how to do it. If you can work with someone who is the majority shareholder of the LLC, you and your partner can set the numbers that you ultimately want to make with the profit. Use your partner’s experience and credit to your advantage during the deal.
After just a few deals, you will have gained valuable experience. While you might lose money in the beginning, you’ve learned the process, built your network, and made yourself a much more desirable borrower in the long run.
Tip 3: If the numbers don’t work, go away
When you use a rehabilitation loan or a private lender like Stratton Equities, they are there to ensure that a business is profitable at the end of the day.
The best way to use a private moneylender to get financing for an investment property is to allow the mortgage company to provide the financing for most of the business.
In doing so, the potential borrower / real estate investor’s loan scenario is guided through the underwriting process which not only verifies the property’s value but also ensures that the loan scenario is a profitable investment.
The goal is simple: learn to use your money
With that in mind, I warn real estate entrepreneurs to keep their emotional ties in check. Don’t get fixated on any particular trait and try to get it to work. If the numbers don’t add up to a profitable investment, walk away.
The Bottom Line: Be a Better, Stronger, and Safer Borrower
Any ambitious investor who wants to be successful must focus on becoming a safe and desirable borrower. That means making sure your finances are in order, building your network, knowing when to leave, and bringing something of value to the table.
When you’re ready to invest, Stratton Equities can help. We are the nation’s leading direct hard money and NON-QM lender with an impressive range of programs, lowest private money rates (from 4.375%), a professional team of experienced loan officers and a fast loan approval process.
If you own an investment property and want to speak to one of our loan officers, call Stratton Equities at 800-962-6613, email us, or apply for a loan pre-qualification today!