When it comes to how to buy investment real estate, there are a few questions that you need to ask yourself first. The reason for these questions is because your purchase actions tend to change based on what you are purchasing. As we learned in our series on how to invest in real estate, there are multiple types of investment opportunities that lead to these different purchase decisions. Therefore, the questions you need to be asking are:
What type of real estate investing are planning on doing? Are you purchasing commercial or residential property? Do you want a single family, multi-unit, industrial complex, office buildings? Are you investing in real estate second mortgages?
As you can see from the line of questioning, this is really a very expansive question that could more and more complex. We didn’t even cover foreclosures. Are you trying to learn how to buy foreclosure property? And at what stage of the foreclosure process are you buying in?
How to Buy Investment Real Estate
To try and keep this as simple and applicable as possible, we will break down the most typical purchase outlines that occur in residential and most of the time basic commercial purchases. Please understand this may not follow your real estate investment purchase outline to the letter, but there should be many steps here that will get you familiar with the process as you move forward.
So, without any further delay, let’s get into the process of how to buy investment real estate:
1) Real Estate Investment Knowledge - Before you make any type of purchase decisions in your life, you should build your education and insight into the matter as much as you can. This means that you should get your general knowledge together and also your specific knowledge about the property and area that you are buying in. In short, do your homework.
2) Real Estate Investment Decision – The next step in the process is that of a decision. You need to decide if this is really what you want to do and go for it. Also inside of this decision section is the selection of what type of property you want to purchase. As I mentioned above, there are a lot of options that are out there and each one could effect the purchase decision differently, so be aware.
Next in the decision process is deciding on where to buy the property. Once you have the type of property, let’s say you are looking for a 3 unit multi-family property, then you need to narrow down the market. It would be best if you narrowed your selection down to a street parameter. For example, W Street to the North, X street to the South, Y street to the East, and Z street to the west. This will really help you when you move into the next step and begin to actually search for these types of properties.
3) Real Estate Investment Search - Now that you know that you want to purchase investment real estate, what type of property you want to buy, and where that property will be located within your target market, you need to get out and start searching for these properties. My suggestion would be to use a realtor or your investment network to find out what properties are available to you and your money. Realtors are great because they have access to the MLS system that will give you a choice of thousands of properties that are in your target market.
Thank you for looking into our article on how to buy investment real estate. This article is continued here in this article, Real Estate: Learning How to Invest.
I have been thinking of getting into something along these lines someday but, have to admit, fear of the unknown is getting the better of me. Your post was very insightful and I feel like I’ve learned something as a result. Thank you.
It can be scary, but isn’t everything worth doing and profiting from? Get you a good team around you and take the plunge!
This is timely for me. Definitely something to think about.
You can do it, Niki!
A really useful article. I believe that will help many to decide to start a business.Thanks
I guess we must be prepared in everything,regarding investing properties,you know having a hard time in looking for the better ideas in order to put things in a right place.
Definitely quite an interesting post. Do you believe the commercial market has rebounded a bit as of late?
I am not sold on the commercial real estate market just yet. I still think it is all very soft right now. Are you noticing something different or have an optimistic outlook? Would love to hear why.
I agree with you. however along with these good profits and all that, comes the risk of losing your hard earned money. By the way, this is business. You win some and you lose some.
How do you think the upcoming presidential election will affect the commercial real estate market in the US? Or will it?