Ask yourself These 5 Questions About Real Estate Investing

Deciding to invest in real estate is one of the bestas a house, you may want to pay for it outright.
decisions you will ever make for your future.However, even if you don't have the money to
However, it isn't something you can decide to dopay for it, if it is a piece of property that has
one day and then rush out and do the next.made money in the past, the bank will probably
There is a process that you have to learn andgive you a loan. They know that they will make
lots of information to digest. If you think youmoney on the deal regardless of what happens to
have done that already and you are nowyour investment. If you are looking at a large
prepared to go out and make your first purchase,property that you can't afford outright, you will
here are five questions to ask that will help youprobably be able to get partners or other
to prepare.investors to contribute.
What type of property are you interested in?Is my team in place? You can't do this
Are you interested in a duplex, multi-unit complex,successfully without a team. This is simply
or perhaps just a single family home? Are youbecause there is so much work, and so many
interested in hotels or motels? What aboutdifferent types of expertise needed, that you
undeveloped land? How you answer this questionsimply can't do it all by yourself. There is not
will determine other things that you do later, suchenough time for you to become proficient enough
as how you go about financing your investment.with real estate law and accounting, plus broker
It is also best to focus on a particular type ofyour own deals and manage your own properties.
property so you don't go on wild goose chasesIt is necessary to delegate. That is why McElroy
and so your team knows what they need to cluesays you start with a lawyer, an accountant, a
you in on.broker and a property manager. After that, you
Do you have a specific area that you aremay also need appraisers, tax consultants, a
interested in? Are you going to invest in the citysurveyor, a structural engineer, an architect, an
where you live? If not, what part of the countryestate planner and more.
are you interested in? The Internet is your bestHow much do you have to spend on repairs? This
resource for determining what area of theis essential. Knowing this will help you determine
country you would like to put your time andwhat areas to look around in because some areas
money into. Ken McElroy, author of "The ABCs ofmay be full of old buildings or some newer
Real Estate Investing," calls this Level I research.buildings may actually be in serious need of repair.
Later, when you have determined a part of theYou will want to what you are getting yourself
country and a city in which to look, you will needinto and whether you can handle it.
to decide on a neighborhood. You will discoverThis isn't a an exhaustive list of questions. Once
that during McElroy's Level II and Level IIIyou start your investment property adventure,
research.you will discover a consitent list that you will need
Do I have a plan to pay for it? The type ofto pay attention to. But these will get you started
property you are looking for (as well as youron the path to asking yourself the best questions.
existing equity) will help to decide how you canSometimes asking the right questions is more
buy the investment. If it is a small property suchimportant than the answers themselves.