Are you thinking about investing in real estate? That’s great! Investing in real estate affords you the opportunity to improve your cash position and create new personal wealth. Real estate is tangible, engages the art of negotiation, and will always have value even in the worst of times.

But real estate investing has risks which are serious enough to cause the opposite results to occur that is a loss of your cash and wealth. These seven steps will help you to prepare and avoid many mistakes as you enter the real estate market.

1.

Know your financial status and develop a financial statement 
Analyze to determine if you:

Are cashing out your expenses at less than 70 percent of your monthly income,

You pay yourself 10 percent or more per month,

Your reserves are 250 percent or more of your disposable income.

If so, your financial vital statistics reflect stability and good spending control. When your financial status does not meet these standards, you should still commit your data to paper and generate a statement. This can be your baseline to measure change.

2.

Review your credit status 
A review of your credit profile whether you have issues with credit or not is advisable. Be aware of the factors that increase your score such as type of accounts, decreasing outstanding balances, and timely payments. A low credit rating does not prevent you from investing in real estate, but it should get your attention to develop a corrective plan to improve your score.

3.

Attend educational training seminars and workshops 
The real estate industry is dynamic and has many moving parts. Your success is related to your education and training. You can take advantage of the many good webinars, seminars, workshops, and newsletters that are low cost or free. When you are beginning, I suggest that you attend to listen, learn, meet, and network. As you learn and receive advice, you are in a better position to choose wisely in buying investment services and products.

4.

Set long-term goal and develop a personal plan 
Setting a goal and developing a plan to realize your goal is often talked about and less often completed and executed. A good beginning is to answer these five questions:

1. Where am I?
2. Where do I want to go?
3. When do I want to get there?
4. How can I get there?
5. What am I to do to get there at the projected time?

These questions can be answered in 2 to 12 pages. I prefer the 2 pages.

5.

Write a trial proposal 
Use your home, the apartment building you are living in, or another piece of property that you can obtain enough data to write up an investment proposal. This non-threatening approach along with reading will help to bring together parts that may not be apparent from reading and discussion alone.

6.

Take a tour of property 
You can do a drive-by or interior site view of the property that you’re interested in. With current technology, you can get street and neighboring views of properties from your desktop or mobile computer. As a beginner, an actual visit to some of the properties that has your interest is advisable.

7.

Choose a mentor 
In this industry, a personal guide will pay off many times over. That guide may already be within your inner circle. If not, there are certainly many mentors available and some may not charge or others have reasonable fees. So take your time, observe carefully for the mentor that understands your vision and has an interest in you succeeding.

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