Real Estate Investing is not a hobby, it’s a business. Unfortunately, too many people treat it as a sideline and don’t take it seriously. They jump into investing because either they have always wanted to own rental property or because someone told them it was a great time to buy to increase their networth. Seldom do they take the time to think about their strategy.
To be successful over the long term, seriously consider what you are doing and why you are doing it. Have a plan. Be prepared. There are hundreds of different types of properties, multiple ways to hold or unload them, plus thousands of ways to structure deals. The more specific you can be in your goals, especially in the beginning, the fewer mistakes you will make and the more profitable each property will be.
The basic questions to ask yourself BEFORE you start include:
- What type of property are you going to focus on (single family, 1 - 4 plex, multi-plex or apartments, commercial, condos, mobile home, etc)?
- What do you plan to do with the property (rent it, rehab it, wholesale it to another investor, live in it, etc)?
- What is your alternative plan - just in case your first plan doesn’t work (for example, what if you can’t find a long term renter, are you going to do vacation rental?)?
- How long do you plan to hold the property?
- What types of repairs are you willing to do (My general rule of thumb is that I don’t do foundations or roofs)?
- How much do you want to make off each property?
- How are you going to finance the property and any repairs?
- Who are you going to need on your team (title company, lawyer, accountant, contractor, etc)?
- What location/city/area are you going to target for investments?
When I first started investing, my plan was single family homes on the Central Coast that I could rehab and sale within 30 days and walk away with a minimum of $30,000 after expenses. I did not do roofs or foundations. Most of the work was done by myself and my son. I hired plumbers (for big plumbing jobs) and electricians and an experienced tile person. I worked directly with one particular title company. Because I was very specific in the types of properties I was looking for, I could quickly walk into a for sale property and tell if it met my criteria. As a result, I walked away from more properties that I made offers on.
The final thing to consider when investing is what kind of reputation you want to build. To that end, always try to create win-win situations, don’t be greedy, walk away from dishonest people and shady deals, remember the “Golden Rule” of treating people how you want to be treated, and pay your contractors quickly and accurately. Always remember that your reputation makes or breaks you!
REALTORS ® (C.A.R.) reported positive trends in single-family home sales and the ‘experts’ start screaming rebound or turn around, the worst is over!
The one major wildcard that deserves close scrutiny and analysis for the California Housing Market is still the homes going into foreclosure (sorry, I just had to bring that word up again).
If you have been an investor for any length of time at all, you will have learned, somewhere along the line, not to show your houses to potential buyers until the all repairs have been completed and the project is finished.
Remember, purchasing a home is an emotional decision, not a logical thought process. 
More people can afford to buy a home today than at any time for the past 20 some odd years. HOLY MOLY! Not only are home prices down but interest rates are still at all time lows which means that the monthly mortgage payment could be less than existing rents.