How To Start A Real Estate Investment Business
To start a real estate investment business you will need experience, know-how, money, patience and help. A good investment business depends on how much time you have had in dealing with tenants in the past. Past experience could be by owning rental property or managing properties for others. A real estate investment business is just what it says, a business built on investing money for profit and independence.
- Investigating city requirements to open a real estate investment business. The very first step in opening a real estate investment business is to check with the city about the requirements to open an investment business in your neighborhood or locality. You will need to get a city permit, establish a business name (DBA - doing business as) and check on any zoning requirements.
Locating an office for your real estate investment business. Renting an office or purchasing a building will be your next step. This office should be in a good location with easy accessibility. Signing a lease for a long period of time is normal, if you have lots of experience in real estate investments. Consider signing a short lease if you or your partner is new to this type of business.
- Setting up the office. Now that you have the building permits and office, you will need to do some basics for the running of your office. You will need to have all utilities turned on and placed in your name, furnish and equip yourself for business and hire a staff to help run the day-to-day operations.
- Look for property. Contact other realtors, brokers, banks and investment corporations in search of properties. Have a budget set as to how much you want to spend and buy smart. Using due diligence, search out the properties, do a net sheet and search title records to look for additional liens, back tax problems and who is the legal owner of the property. Go to the property and search the neighborhood for any noise problems, graffiti, and other properties being listed.
- Financing. After finding the properties, you must finance the properties for your investment business to purchase. No real estate investment business can survive without good financing. Accepting a loan with high interest rates, pre-payment penalties and adjustable rates may bankrupt the investor. Use a bank you have had experience with in the past.
- Management and maintenance. The final steps in running your real estate investment business is to set up a maintenance crew, management team and realtors to rent the apartments for you. A smart investor will manage the building themselves!