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Real Estate Investing First Deal Jitters
It's very normal to get first deal jitters in real estate investing.
There are several real issues:
1. Real estate is a big investment, the dollars are large, so there is great risk but also great rewards. Its much different signing a contract for $100,000 or more that you are going to manage yourself than to send $1000 to the bank and have it put in a cd. Of course when you put your money in the bank it goes down in value as inflation is much higher than the return the bank will pay you. While your real estate investment will grow with inflation but since you have only a small part of your own money invested it will grow at 10-20 times the rate of inflation.
2. When you are new it is hard to know the value of a neighborhood and what is a realistic exit strategy. Find out how other investors are selling their homes. Are they retailing them? Are they doing rent to own, otherwise known as lease option or lease purchase? Holding long term as rentals and cashing out their equity? There are a number of strategies investors can use and some are better than others for certain neighborhoods.
3. Real estate investing is work, you have to go get involved in a multi step project for every property, and that can be intimidating. You just have to learn to write down everything that needs to get done and accomplish small tasks every day and before you know it you will be a real estate investing pro.
Only experience will teach you when its an obvious deal. Look on www.realtor.com and see what realtors think houses in that area are worth. Drive around a few blocks and call any for sale signs and then go lookup the tax assessor info on those addresses and see how they compare.
