The Who What When Where and Why of Real Estate Investing in 2023 - Build Investing Success

Who what when where and why - Every successful real estate investor knows that in order to succeed you need to ask the right questions.

If you are unfamiliar with real estate investing, you might believe that your only goal is to find homes with the highest possible returns. Unfortunately, relying solely on financial criteria to make investment decisions might lead to significant problems with your plan.

If you choose real estate based solely on interpersonal variables, convenience, and your knowledge, you may miss out on chances that are less valuable but easier to buy. While financial independence is a desirable objective, it should never be a source of worry or sacrifice your quality of life.

Before investing, ask yourself the following: Who what when where and why?

But first, before you ask who what when where and why you should invest, take the time to ask how. Or, click the link below for a free strategy call and let us show you how you can invest in real estate with the best available financing today.

Who are you investing your money with?

Real estate is a relationship-driven business. Investors, particularly first-time investors, frequently engage in transactions with investing partners. It's crucial to always work with someone you are comfortable with, whether a family member, friend, or someone you met through your local real estate professionals network.

It isn't easy to talk about money.

When it comes to real estate transactions, a lot of money is involved, making it difficult to express concerns. You are better off finding another investing partner if you don't have a clear channel of contact with someone who is well-capitalized.

What you are investing your money into?

Although multifamily rental housing offers the highest rate of return, it is not the best sort of asset to invest in.

For example, many investors believe it is better to purchase a single-family home and rent it out. For various reasons, this is much easier than renting out a multifamily property. It can provide you the knowledge and expertise you need to pursue more complex transactions in the future.

Also, be wary of buying properties that appear to be beautiful bargains. These properties may have significant issues that will cost a lot of money to fix, resulting in a reduced rate of return.

When is it better to invest your time or money into something?

You'll spend a lot of time with your investment property if you are merely looking to earn a quick buck. Probably a waste of time.

It may appear like managing things yourself is less expensive than hiring a professional. However, this isn't always the case. Most real estate investors, especially those who are just starting, have full-time employment. You'll rapidly become burnt out and disappointed if you spend all day at the workplace and every evening trying to patch up your property. Property management costs money, but it's money well spent. It aids many investors in preventing their riches from taking over their lives.

Burnout, on the other hand, isn't just about discontent. It could impair your judgment and lead to poor financial decisions, compromising your real estate investing career.

Although it may be slightly more expensive upfront, hiring professionals to undertake specific work on your property is typically well worth the investment. The time you'll save will be priceless.Where are you investing your money? If you are looking to make a real estate investment shortly, places with hot, hyperactive real estate markets may appeal to you. After all, isn't it where you are most likely to make a substantial profit based only on asset appreciation?

Certainly not. Hot real estate markets take more time and effort to enter, and they can be exceedingly costly to operate in. While experienced, well-heeled investors might earn handsomely in market fluctuations, newcomers may find it challenging to build up the infrastructure needed to manage their assets.

Instead of focusing solely on the possible returns of a particular asset, consider the general location of a potential investment. Is it easy for you to get there? Is it, if not, in a place where you love spending time? You'll almost certainly have to commit to spending some time at your investment property. You are letting your investment portfolio dominate you, not the other way around if you spend hours traveling to a place you don't love spending time in.

Consider the general market fundamentals in addition to convenience. This includes any barriers to entry in the market you are looking into. Buying a high-quality apartment in downtown Toronto may appear lucrative, but you may end up spending more on maintenance than you thought. Examine the market's history, job market, and economic prospects to see if it makes sense to include it in your investing strategy.

Discover How To Buy Unlimited Rental Properties With This Step By Step Guide

Why are you investing?

Stop investing in real estate if you don't have a clear, recognized motive. If you aren't actively working toward measurable quarterly, yearly, and long-term goals, you shouldn't be investing in real estate.

You must be able to think long-term to be a successful investor. If your sole goal is to gain money, you are more likely to make poor investing selections, which will limit your ability to seek other options.

Making money by investing in real estate isn't well defined

Everyone wants to increase their wealth. What do you propose to do with your freshly acquired assets? Do you have a strategy in place to either conserve or reinvest your real estate profits?

Many people invest in real estate to become financially independent.

For example, by diversifying your real estate holdings, you may be able to retire sooner than expected and live well outside of a regular corporate 9-5 employment. Others purchase real estate to add to their current investment portfolio.

Regardless of why you are buying real estate, make sure you have well-defined objectives that you can track on a quarterly and annual basis. There's no way to know if you are successful or not if you don't have any!

That is why you need to know the who what when where and why for all of your investments.

While the goal of any real estate investor is to make money, establishing clearly defined rules and limitations for your investment activity assures that you are working toward a positive investment outcome.

Once again, before you ask who what when where and why you should invest, take the time to ask how. Or, click the link below for a free strategy call and let us show you how you can invest in real estate with the best available financing today.

The Who What When Where And Why of Real Estate Investing, With Scott Dillingham