Real Estate Investing 101

Real Estate Investing 101 real estate investing for beginners

the miale team at keller williams

www.themialeteam.com | 860-539-2255

T A B L E

3

O F

C O N T E N T S

WHAT IS AN INVESTMENT PROPERTY? Let's start at the basics.

4

WHERE TO START

7

Get started on your investing journey...

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BENEFITS OF PROPERTY

6

MISTAKES Hint: It's nothing like the design shows!

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INVESTMENT Why real estate is a better investment than the stock market.

COMMON

SIX-STEP PROCESS Don't worry, this isn't a sales pitch.

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SUMMARY What we learned today...

PROFITING FROM PROPERTY Rental Income, Fix & Flip, Vacation Rentals...the opportunities are ENDLESS.

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CONTACT US We've got you covered.

LET'S BEGIN!

What is an investment property?

Are you an entrepreneur? Do you have an interest in real estate? Consider purchasing property as an investment!

Whether it's through rental income, fixing and flipping, or countless other strategies, real estate investment can open the door to endless wealthbuilding possibilities.

So, let's start at the basics. What is real estate investment?

Plain and simple, real estate investment can be defined as "real estate property purchased for the purpose of earning a return on the investment." Real estate investing involves the purchase, ownership, management, rental and/or sale of real estate for profit. There are numerous real estate investing strategies available, such a flipping and rentals. Many real estate investors will combine one or more to build a diversified portfolio.

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Where to start Identify Your Financial Stage

Choose a Specific Real Estate Investing Strategy

Line Up Cash & Financing Options

You want to know your current stage

Begin with ONE real estate strategy

There are multiple financing options

because depending on where you are,

that will help you move from your

for investment properties. Discuss

certain real estate strategies will make

current financial stage to the next

your options with a lender to decide

more sense than others. Analyze your

stage. Starting small will help you

which option is best for you. Be sure

cash flow and research strategies to

focus and give you the confidence

to allow enough funding for a down

define your financial goals.

to get started.

payment, repairs, maintenance, and inspection fees.

Questions to consider... . . . How much time do you have available to devote to your real estate investment? . . . How much of a down payment and mortgage do you need to get started? . . . What’s your investment timeline?

. . . What are the local opportunities and risks?

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PROS OF PROPERTY INVESTMENT WHY IT'S A GREAT INVESTMENT OPTION

Passive Income

Growth Potential

Stability

Predictability

Increasing Value

LOWER RISK THAN THE STOCK MARKET

CONSISTENT CASH FLOW

TAX ADVANTAGES

LONG-TERM RETURNS TYPICALLY POSITIVE

DIVERSIFIED PORTFOLIO

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PROFITING FROM PROPERTY You've decided you're going to take the plunge and invest in real estate! Now, it's time to make a plan and determine which investment strategy is right for you.

There are many strategies, but if this is your first investment, it's best to narrow it down to just one.

BUY & HOLD Buy a property, maintain it, and passively wait for its value to go up. Regardless of changes in the housing market, real estate prices will always bounce back because of the ever-increasing demand for homes.

RENTAL INCOME Buy and manage a residential property for a profit.

Choose a location where market appreciation is likely, and make sure you can charge enough rent to make a profit after covering all your expenses.

FIX & FLIP Buy a property that's undervalued, often because it is in poor condition. The goal is to repair and improve the property to sell it for a profit a few months later.

To be successful at flipping, you need a broad skill set and experience to manage a successful, swift, and cost-efficient rehab and resell quickly.

VACATION RENTALS Short-term rentals can offer long-term returns!

Rentals through Airbnb and similar websites provide various features to best maximize your investment.

Charge higher rates during peak season to make more money and lower rental rates during the off season to optimize your occupancy rate.

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COMMON MISTAKES Don't fall for these pitfalls! Before embarking on your investing journey, be sure to keep these common mistakes in mind.

FAILING TO RESEARCH Research is key to becoming a successful real estate investor. Knowing the ins and outs of investment strategies, property values, and financial implications can make or break your first investment.

DECIDING IMPULSIVELY Give yourself time to prepare and plan for your next investment.

Before getting a mortgage or plunking down cash, you need to decide on an investment strategy. What type of house are you looking for? A one-family or multi-family, vacation rental or a commercial property?

MISMANAGING CASH FLOW Remember to take into account the costs associated with owning a property. Make a list of all of the monthly costs associated with running and maintaining a house (estimate) before actually making a bid on one. Don't forget insurance and property taxes!

SELF-MANAGING INSTEAD OF HIRING EXPERTS Assemble a team of professionals, such as a real estate agent, an attorney, and a handyman to help you succeed. It's never as easy as it appears on TV! Don't assume you can DIY everything after watching a design a show. They have experts, too!

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Six-Step Buying Process FROM PLANNING TO EXECUTION

01

Hire Your Agent

02

Secure Pre-Approval Financing

You have the facts, your agent has the expertise. The goal of a real estate agent is to get you to the finish line with little to no hassle. Your agent should educate you about the market, analyze your goal, find property matches, negotiate on your behalf, and solve any problems that may arise.

Know the differences between pre-qualification and pre-approval. Pre-qualifying is just the first step and gives you an idea of how large a loan you'll likely qualify for.

Pre-approval means you’re ready to buy, and puts you in a stronger position when making offers on a property. Once you get your pre-approval letter, you’re ready to start looking for your first investment property!

03

Find Your Property Have a clear vision of what type of property want to invest in and communicate with your agent about the features you are looking for in the property. With this crucial information, your agent will create a search and introduce you to homes that fit your criteria.

04

Make an Offer and Negotiate Time to make an offer and negotiate with the sellers. The offer must reflect the true market value of the home, financial considerations, and contingencies - the conditions that allow you to opt out, for example, after receiving the inspection report and discovering foundation issues. Everything is negotiable!

05

Inspection & Repairs

06

Close!

A home inspection is a critical part of the buying process since it will help your agent negotiate the repairs needed. Don’t sweat the small stuff, focus on cracks or crumbling in the foundation, water stains, plumbing or electrical problems, and mold or termite issues.

Congratulations! You've reached the finish line and you now own your first investment property. Be sure to keep yourself mortgage-worthy and budget for additional expenses, such as closing costs, earnest money, and improvements and repairs after the sale.

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Summary ARE

YOU

READY

TO

BEGIN

YOUR

INVESTING

JOURNEY?

Investing in real estate can be intimidating. You may have considered purchasing a home for a rental investment, but you have questions around financing, finding a tenant, and insuring the property. You may be hesitant to start the overall process because of the time and energy it can take to navigate the uncertainties alone. That’s why it’s so important to find a reliable and experienced professional to help guide you through your investment journey. At The Miale Team, our primary goal is to empower you with the resources and guidance to feel confident in making those important decisions.

We commit to . . .

Educating you about the market Analyzing your wants and needs Guiding you to properties that fit your criteria Coordinating the work of other professionals Negotiating on your behalf Solving any problems that may arise When you’re ready to get started on this journey, we will be honored to accompany you. Good luck—and remember your agent is here to help!

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want to learn more?

The Miale Team at Keller Williams is an award-winning real estate team of professionals serving the State of Connecticut. Whether you are looking to buy a new home, sell your home, or both, our team of listing and buyer's agents can thoroughly address your needs and guide you every step of the way.

Our mission is to empower people, the people we serve and those we serve with. We are committed to empowering our clients to achieve their goals and help fulfill their housing dreams.

Our agents provide exceptional service through a variety of tools, resources, and a simple and streamlined transaction process. From start to finish, we will be there by your side through this process and help you make the best decisions for you and your loved ones.

Contact Us

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The Miale Team at Keller Williams 860-539-2255 | www.themialeteam.com