This week, we’re going back to basics and answering some fundamental questions about getting started in real estate.
Today, I am going to help you decide what you are in this business. By that I mean deciding what area of real estate you want to get involved in: flipping houses, wholesaling, or buy-and-hold investing. How do you know what you are?
There are a few things about yourself that you need to take inventory of. Deciding what kind of real estate you want to do is kind of like dating; sometimes you have to go on a first date, or give something a try, and see how it feels. Each kind of investing in real estate takes a different amount of time and effort, but also makes different amounts of money. For example, buy-and-hold investing generally involves less ongoing work, but the cash flow starts off slow. Flipping houses requires constant attention in the beginning, but can net you more money with each deal. Wholesaling doesn’t require much money up front, but also makes less money.
You have to think about:
- your financial goals
- your risk tolerance
- the time you have to devote to your business.
A few more questions to consider:
- Do you enjoy managing projects?
- How much money do you have available to you?
- Do you enjoy hiring people/delegating?
- What makes sense for your lifestyle?