5 Golden Rules for Investing in Property
1.
Make your money on the way into the deal 2.
Fact vs Opinion! 3.
What's your exit? 4.
Create the Plan 5.
Right Team 1.
A good investor is a master at managing risk, the biggest investment risk is that the deal you are considering will end up costing you money.
To eradicate this risk only do a deal if you are certain it'll make you money and the best way to do this is make sure you're making money on the way in.
Bottom line buy your deals at a discount and you know your ahead of the game before its even started.
The bigger the discount the bigger the margin for error.
2.
When looking at an investment check what you believe to be opinion and what is fact.
Many a deal has gone south because an investor has confused their opinion with fact.
In order for a deal to work an investor must make certain assumptions; resale value of the property, market rent of the property, cost of refurbishment, time to refurbish and lots of others.
Take short cuts at your peril through the due diligence phase of analyzing an investment.
3.
Anyone who has set out on journey knows the importance of knowing their destination before departing.
The same applies to investing in property, the exit one chooses for a property deal can have a profound impact upon the return that investment yields.
Best practice states that having up to 3 exit strategies which can run concurrently will yield best results.
4.
With your exit identified it's important to create a plan.
The plan fulfills a number of functions.
The process provides an additional sanity check on the project, it's a risk management tool against which progress can be measured and tasks allocated.
5.
The fastest way to gain experience around a table is to incentivise someone to sit down at the table with you.
There are lots of parts to a property deal and no one person can do them all.
Many of the roles require special qualifications and can only be done by industry professionals, having the wrong person around the table can jeopardize the deal and end up costing more money.
The great news is that these industry professionals are used to working in teams and expect it, therefore it is relatively easy to locate them.
Property Investment is one of the most popular methods of investing and it has a lot going for it.
Follow the 5 golden rules above and join the ranks of the 1,000's of property investors that invest for a living.
Fail to follow them and you will quickly find your resources depleted and your new career as a property investor in tatters.
Make your money on the way into the deal 2.
Fact vs Opinion! 3.
What's your exit? 4.
Create the Plan 5.
Right Team 1.
A good investor is a master at managing risk, the biggest investment risk is that the deal you are considering will end up costing you money.
To eradicate this risk only do a deal if you are certain it'll make you money and the best way to do this is make sure you're making money on the way in.
Bottom line buy your deals at a discount and you know your ahead of the game before its even started.
The bigger the discount the bigger the margin for error.
2.
When looking at an investment check what you believe to be opinion and what is fact.
Many a deal has gone south because an investor has confused their opinion with fact.
In order for a deal to work an investor must make certain assumptions; resale value of the property, market rent of the property, cost of refurbishment, time to refurbish and lots of others.
Take short cuts at your peril through the due diligence phase of analyzing an investment.
3.
Anyone who has set out on journey knows the importance of knowing their destination before departing.
The same applies to investing in property, the exit one chooses for a property deal can have a profound impact upon the return that investment yields.
Best practice states that having up to 3 exit strategies which can run concurrently will yield best results.
4.
With your exit identified it's important to create a plan.
The plan fulfills a number of functions.
The process provides an additional sanity check on the project, it's a risk management tool against which progress can be measured and tasks allocated.
5.
The fastest way to gain experience around a table is to incentivise someone to sit down at the table with you.
There are lots of parts to a property deal and no one person can do them all.
Many of the roles require special qualifications and can only be done by industry professionals, having the wrong person around the table can jeopardize the deal and end up costing more money.
The great news is that these industry professionals are used to working in teams and expect it, therefore it is relatively easy to locate them.
Property Investment is one of the most popular methods of investing and it has a lot going for it.
Follow the 5 golden rules above and join the ranks of the 1,000's of property investors that invest for a living.
Fail to follow them and you will quickly find your resources depleted and your new career as a property investor in tatters.
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