What I love most about real estate investing is its variety. Every week presents a different set of challenges, forcing me to think creatively and take action. This week I wanted to share some thoughts on three common questions: where should I invest, what tips do you have for property managers, and how do you pay for everything?
When I choose where to invest in real estate I do it based on the strategy I’m trying to follow. If I wanted to flip a property, I would look at hot markets that tend to be in the coasts of the united states such as California, Texas, Florida, and New York. However, if I’m looking to purchase a property for rental income then my focus would be in the middle of the country where prices tend to be lower and therefore, in theory, you would receive a better return on your investment. Of course, you can find both situations in cities across the country, but those are my general guidelines.
Now let’s say you picked a city, purchased real estate and are now renting to tenants. While this may feel like the end of your journey, in actuality it has just begun. Here are four tips that I like to give every new property manager:
1) Create a self managing system where by tenants report and follow up on maintenance issues to a third-party
2) Look for incremental revenue opportunities such as storage, cleaning services, extra parking spaces, faster Internet for the building, etc.
3) Conduct quarterly inspections to be proactive about building maintenance
4) When visiting the property, always be on your phone so that a tenant cannot grab you hostage into a conversation
Lastly, I want to touch on how real estate investors spend most of their time. Two words: finding money! I’m always looking for ways to fund my next purchase with my current properties, which takes a strong team of brokers, contractors, and realtors.. Last week most of my time was taken up by refinancing an investment property I have to fund renovations for a flip in Santa Monica that I started two weeks ago. The work paid off, I didn’t have to spend a dime of my own money!