A real estate investor whose firm says it holds $282 million in assets shares 8 insider tips that will give any beginner an edge, even if they have no cash to start
James Nelson says if you're good at finding deals, you can find a partner who has the capital.His preferred property type is multi-purpose because it includes both residential and retail units.
But unlike other investment opportunities, real estate appealed to him because there were numerous areas where an investor could exercise control to increase the return on their investment. This could be done either during the deal phase or once you own the property. Another area of exercising control is by adding value to a property through renovations or by just being a better property manager than the previous owner, he noted.
If you don't already know someone with the cash, building a large network is a great way to meet potential partners. Start in places like real estate associations that regularly host events, conferences, and even breakfasts in cities across the country. On the other hand, if a seller is in a sticky situation, there's room for negotiation because their priority is to offload the property. For example, it could be a partner dispute that both parties want to get out of. Or, if it's an estate sale, the executors are often willing to sell at whatever the market clearing price is, he added.
Many investors will buy a residential multi-unit property, which could have up to four units. This allows them to live in one and rent out the other. This setup can get you favorable financing through conventional loans while offsetting your living costs, he noted. Once you go over five units, it becomes a commercial property. These properties require more time and management. If you're not an experienced landlord, you may need to enlist the help of a management company.
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