Investing in real estate requires dedication and perseverance. A common trait among many successful real estate market investors is the willingness to ride out many waves in order to achieve maximum success with the long-term goal. Investing in real estate is not a sprint, but a marathon.
If you see the potential returns at the end of the marathon as a motivator to enter the investment industry, we at Memphis Cashflow are happy to assist you in whatever ways necessary. We know that the steps to enter can be daunting, so we hope that our steps to get started prove valuable to you.
Before any decision in life, most people look at what the task at hand requires, reflect on the resources at their disposal, then take appropriate action based on the likelihood of completing the task successfully. Likewise, choosing to enter the Memphis real estate investment market demands access to the proper resources.
Capital tops the list as the most important resource to begin investing. Sure, that sounds like a no-brainer, but we want to be sure you understand its importance. As you search for the first investment, be sure you have adequate capital in pocket. Without it, you put yourself in a major hole before you even get started.
Real estate investing also requires excellent credit. Think about it—you plan to acquire investment properties for numerous tenants. First, the bank can see the risks associated with it. Second, you want to be presented with the best possible financing terms. Having excellent credit will benefit you. Be sure to check your credit score and handle any disputes before investing.
If this is your first investment property, start small. Also be prepared for risks. Sometimes months could go by without a renter in the home. This is usually not the case, but it is best to consider these kinds of scenarios when examining your resources.
Before jumping into real estate investment, an honest look at the local market is critical. Yes, we believe that Memphis, Tennessee real estate investing provides substantial opportunities and room for growth. But, each investor sees a market through unique lenses.
If the market’s dynamics are attractive to you, take the next step. However, if you hesitate with or feel reserved about the jump into real estate investing in Memphis, you may want to explore other opportunities. Never invest in something you feel will not create adequate returns.
Once you have committed to the Memphis real estate investment market, start looking for properties! As you begin, be wise about the properties you consider. Sure, cheap properties will always exist, but will quality tenants want to live there? As you look around, consider properties where you see quality tenants desiring to live. These tenants ease the stress of flipping or owning and managing a property.
When you start out, you instantly will have questions and, perhaps, be skeptical of the decision to invest in real estate. It happens to all of us. Push through and realize that others like us are here as resources.
After you find a property you want to invest in, run the numbers. Acquisitions require a multitude of steps, and the process is especially daunting when you have never done one before. Be conservative and realistic with the numbers, ask questions to your team and take your time. You will be a pro in no time.
Once you have the acquisition in hand and have ownership of the property, you need to set up a process to build cash flow and get rid of those mortgages. Patience is critical, but proper planning and execution can fend off years of mortgage and stress. After you are settled in, take a good look at the cash flow coming in and construct a plan that fits and moves the needle.
After years of dedication and perseverance, that mortgage will be lifted off your shoulders. From there, you are earning profit. Congrats! This cash flow can also be a huge help when it's time for you to retire. However, keep pushing yourself to provide the best quality to the tenants of your property, and you will receive the rewards of your work.
There are two ways you generate income from an investment property- through appreciated value and rental income. Over time, most houses increase in value. However, in order to make a profit from appreciated value, you must hold on to the house and then sell when it's the ideal time. Rental income is one of the main reasons people buy investment property. Especially after you pay off your mortgage, it is a steady stream of income. Just make sure that you set aside money for repairs and upkeep as needed.
Are you interested in entering the Memphis real estate investing industry? We would be happy to help you get started. Give us a call at 901-213-6102 for additional information on your next step as a real estate investor! We will go over all of your options, as well as answer any questions you may have.