Ready to invest in Metro Detroit real estate? Adding real estate to your portfolio can greatly increase your wealth. In our latest post, we cover 6 steps to building a powerful real estate portfolio in Metro Detroit!
A truly savvy investor will fill their portfolio with all kinds of investment, varied things that offer high returns and diversification. Adding real estate may seem like a big step, especially to novice investors. However, once you have done your homework and gotten a few properties under your belt, the process becomes incredibly simple. Keep reading to learn about the steps to build a powerful real estate portfolio in Metro Detroit!
Step 1: Learn About Real Estate Investment
There are all kinds of ways new real estate investors can expand their knowledge. There are a number of excellent online courses available, making the learning process incredibly convenient. You can also dive into all of the great books written on the subject. Your library is bound to have a number of great books available right now! Seminars are another great way to learn, they also give you the opportunity to meet many like-minded people. Depending on where you live, there may be an investment group nearby. Networking with other investors is one of the best ways to learn about the business and find out about the best deals.
Step 2: Set Your Goals
What are you trying to achieve through real estate investment? Are you just dabbling or do you want to make this your career? You can choose investments that require little to no work, even hiring a property manager to handle things on your behalf. Or you could get hands on, start investing full-time and build yourself an empire. Sure you want to make money but how much and why? Keeping your why in mind will help you make smart and focused decisions in regards to your investments.
Step 3: Create A Strategy
As they say… a goal without a plan is just a wish. A great investor will treat their investments like a business and a great business has a great plan. You’ll want to know the numbers and the price point you need to purchase in order to achieve a profit. Many investors will have a formula they stick to. Maybe they will only buy properties for $0.60 on the dollar. They’ll sink another $0.02 into rehab, leaving them with a $0.2 profit. If a property doesn’t fit int this equation, then it’s on to the next one. There are many other formulas investors use to determine potential profits. Make sure to have a clear grasp of the costs and stay within your limits.
Step 4: Buy Your First Property
This might seem like the scary part, but it’s important to take that leap. If you have educated yourself, aligned yourself with knowledgeable experts, and done your research on the property, you will have minimized your risk as much as you are able to. Of course, anything can happen, but by doing your homework and planning ahead you can hedge your risk.
Knowing all that, this becomes the fun part. Take a look at a few properties out there to familiarize yourself with what’s available. If you find a property you like and the numbers are there, it’s time to make your offer. Keep in mind, this is an investment property, not the house you will be living in. No house will be perfect and you can’t expect them to be. Find something with potential and don’t hesitate. You’ll be kicking yourself if you miss out on a great deal simply because you didn’t get your offer in time.
Step 5: Build The Right Team
You can only become so successful working on your own. As your portfolio and wealth begin to grow, you’ll need to have the right people in your corner. These people will provide advice, support, and help you avoid making a decision that will end up costing you down the road. A great investor will have a top-notch agent, accountant, lawyer, and contractors they trust to work with on every deal. Having the right team will save you time, money, and the hassles of miscommunications.
Step 6: Acquire More Properties
Once you have completed your first successful deal, you refine your methods and repeat. You can use the snowball method to build your portfolio faster than you might think. You can also choose to work with partners or diversify into other investment types. Additional single-family properties, multi-family properties, apartment buildings, or commercial properties are all logical next steps.
Before making any financial decision, it is important to consult with your accountant, financial planner, or lawyer! Anyone can start today on the road to building a powerful real estate portfolio! We are always here to help if you have any questions!