Most real estate investors are well aware that purchasing property using your own money isn’t likely a viable strategy. At least not for the long-term. With that in mind, finding and working with investors to help get your properties funded is essential. But, with so many different options to choose from, how do you narrow down which investors might make for good business partners, and which ones you should forgo?
Aside from interest rate and terms – which are still extremely important factors – there are two criteria that you need to consider with any investors / partners that you are considering. These are honesty and transparency.
How do you know that an investor possesses these qualities?
Oftentimes checking with other current or past clients for referrals and / or reviewing testimonials can be telling. In addition, ensuring that the investor shares similar end goals for the investment is key. For instance, is the investor focused more on long- or short-term opportunities? And, how to they expect to be paid?
As a newer real estate investor, your options for potential investors are wider than you may think. By taking the time to truly research and get to know your potential funding source, you could save yourself many years of having to “unravel” deals that don’t go your way – even if the interest rate and terms initially appear to be favorable.
Once you have several properties in your portfolio, the time that it takes to manage the maintenance and the tenant needs can be significant – and in many cases, it can make sense to work in conjunction with an experienced property management team so that you can delegate some or all of these duties.
Doing so can both free up your time, and allow you to profit using more of a passive income approach. Need more information? Give us a call today.