As you know, one of my most important sources of income is investment in real estate.
With the experience I have acquired, I have created the first Italian seminars on investing in real estate which have been attended by thousands of people.
In this article I want to show you the 5 key rules to investing in real estate. There are things that I have learned and apply them personally, so here I will show you what rules I follow.
Are there any exceptions? Of course, there are always exceptions, but you can only break the rules if you know them!
Investing in Real Estate is the first ebook in Italy that teaches you how to invest in real estate, even without any money: download now.
Rule 1: Buy real estate only in your immediate vicinity
Focus, at least in the beginning, in your area of residence and, if you live in a big city, then lower your scope to your neighborhood or at least one that you know well.
In addition, only buy in the residential sector; apartments or villas. Commercial real estate, despite being very profitable, has other rules and in general has greater difficulties. The same for land: you can do a lot of business, but it is not suitable for beginners.
Rule 2: Pick one area and become an expert
Read all property trading newspapers and get specialized in that area. You have to know the area where you are investing very well: the trends, the type of population, and especially the prices. You must be able to evaluate if a deal should be considered, as soon as you hear about the price.
The price is the key factor, remember this.
Rule 3: Find very motivated sellers
Not all sellers are equal. Some sellers need money, for example, because they have to move to another city or another country. Some motivated sellers have dozens of properties for sale.
Do not be shy. Investigate tactfully, but with depth, the reasons for the sale. Do not settle for generic reasons that are given by the real estate agent. Discover the real reasons. Find out who the seller is so you can try to turn the deal in your favor.
Rule 4: Decide which financial leverage to use
Real estate investments are made with financial leverage. If you want to make an investment only with your money, you haven’t understood the essence of real estate investment. In fact, financial leverage is the ability to invest other people’s money, not yours, but the gains will be all yours.
Decide if you should take out a mortgage (if you can afford it) or you want to have financial partners. Remember that even the richest people need partners and also keep in mind that an amount that seems almost unimaginable for you, can be normal for someone else.
Rule 5: Always make a written offer
Never make any verbal agreement. Make a legal template in Word and edit it when you use it, changing the data, removing or adding clauses.
At the beginning, like everything else, it will seem difficult, but after a few times you will become an expert in the legal bases of property sales and you will create documents in an instant. I repeat: always written offers, never verbal.
That’s all? There are no other rules? Of course there are hundreds of other details you need to know before embarking on a complex activity, but real estate investment is unbelievably profitable in comparison to the effort involved.
In fact, in addition to my basic 2-day seminar Investing in Real Estate I have another four seminars on various aspects of real estate investment. But these 5 rules are the essence of the mindset of a real estate investor. This is someone that considers a house not as a place to live in, but as a commodity that can be bought and sold to make a profit.
Yes, because I can add this as a bonus sixth rule: do not be a landlord, but an investor.
Do not evaluate the investment as you would do with your own home, eliminate the emotional aspect, the aesthetic aspect, and the involvement of your values. I have sold houses in which I would never have gone to live, and I have sold them, because I considered them as merchandise, not as a property.
The real estate investor does not like brick: he loves the money that brick can bring. A subtle, but essential, difference.
To your financial freedom