Becoming a Real Estate Investor
by Charlie in Real Estate Legal Services
In this era of HGTV, Flip or Flop, Flip This House, and my wife’s favorite – Fixer Upper . . . it is easy to under-estimate the challenges of being a first time real estate investor. At its worst, what you are wagering is that you think you can successfully compete with more experienced property finders, contractors, marketers, and negotiators. It takes contacts, people skills, a good plan, a major commitment of time to work your plan, and some luck. Despite all that, the numbers of people willing to forsake traditional investments like the stock market and try their hand at real estate investing is on the rise.
One of the big equalizers is the internet. It is making information available on a much more equal footing to all investors. On the other hand, there is a universe of puffing, self-serving advice, and outright false or misleading information out there. And what works in one locality could be a miserable failure in another locality.
The world of real estate investing is broad and there can be a niche for just about everyone. But taking a realistic approach is crucial. Click here for a great article on the risks that especially plague first time home flippers.
Our law firm has helped investors for nearly 40 years to flip, buy and hold, finance, develop, scheme and peddle real estate in just about every imaginable format. We’ve seen home runs and strike outs and tried to learn from them all and use our experience to help new investors avoid the latter. We even tried investing some of our own firm retirement funds into several investments with mixed results. One principal I think we can safely say both from observation from others and from our own personal experience . . . it helps if you do real estate as a full time job. Real Estate Law is only one piece of the puzzle.
Another approach that seems to work for many of our clients is the joint venture approach. Partnering with a mentor or more experienced investor reduces your home run potential but also greatly limits the chances of striking out. One way or the other, the principal seems the same — those who are not “self-taught” will usually hit their goals ahead of those that go it alone.