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Real Estate Investment Software Blog

This is the follow up to our last post, Starter’s Guide for Real Estate Investing Beginners, Pt.1, where you can the first three of six real estate investment tips for beginner real estate investors.

In this part, I’ll be giving you three more tips (continuing the number sequence thus starting with number 4).

So whether you’re new to real estate investing, about to become a real estate investor, wondering how real estate investment works, or just want more information about the nuances of investing in real estate, this one’s for you.

4. Run the Numbers

Folks, I can’t stress enough the importance of running the property’s cash flow, rates of return, and profitability numbers. Remember, real estate investing is a business, you are the CEO, and the object is to make money. You’ve got to know what you’re buying before you buy, especially if you’re choosing between several investment opportunities and trying to determine which would be the most profitable.

Foremost, I would recommend that you invest in real estate investment software. Why, because a real estate investment software program will enable you to run your own numbers and create your own analysis reports without having to trust another. It’s best to discover for yourself the investment property’s cash flow and rates of return; and the more prepared you are to conduct your own analysis, and the broader your understanding of real estate investing nuances, the less likely you will inadvertently fall victim to the wiles of someone who has little concern about how you spend your money.

As the CEO of your own real estate investing business, make it your first managerial decision. A few hundred dollars investment for quality real estate software can easily make or save you thousands of dollars later, so it’s worth every penny.

If you choose not to invest in real estate investment software, at the very least, be sure to work with a real estate professional that has made that investment, and can run, present, and discuss those numbers with you.

5. Develop a Relationship with a Qualified Real Estate Professional

Having been a real estate professional myself for the past twenty-five years, I can assure you that working with a qualified real estate professional is a great way for beginners to get started with rental property investing. An astute real estate professional can acquaint you with local market conditions, recommend a property that meets your investing objectives, and discuss strengths and weaknesses about specific property performance.

Just be sure to work with a “qualified” real estate person.

Because someone has a license to sell real estate, or maybe even be top producer at selling houses doesn’t make them qualified to help you with real estate investment property. Select someone who understands investment real estate; has a firm grip on key financial measures inherent to real estate investing; knows how to measure profitability and rate of return; has the ability to present the concise data needed for wise investment decisions; and, well, perhaps most importantly, shows a genuine interest in how you spend your money.

The last thing you want to do is to get involved with a real estate agent that would throw you under the bus just to make a commission.

Work with a real estate professional you can partner with who understands real estate investment property. How can you tell? Ask them about cap rates, cash-on-cash return, and some of the other rates of return, and request an APOD or Proforma Income Statement. If they stand there looking at you like a deer into the headlights of a car, do yourself a favor and find another agent.

6. Start Investing

Yes, you’ll ultimately have to start real estate investing. But now that you have some insight into real estate investment, things you can do to become a more prudent real estate investor, and perhaps a couple of things to watch out for so you can avoid making a bad real estate investment and losing money, all that remains if for you to get started.

Here’s to your success.