How to Invest in Real Estate - Getting Started

Here are tips to help you decide how to invest in real estate to generate your personal cash flow for now or future savings. I'm writing these tips based on past and current experiences.

My wife and I just purchased a property in Latrobe, PA and we hope to fix it up and get it on the market by early summer.

SET YOUR REAL ESTATE GOALS AND OBJECTIVES

Do you want to invest for a profit in the next 12 months or do you want to invest and hold the property long-term so it appreciates?

You can choose between a single-family home or a rental property such as a duplex, triplex or fourplex. Anything more than 4 units changes the financing and it is best to have a business plan.

We have previous experiences selling a house for a profit in less than a year and having a rental that we sold after two years where we broke even.

Currently, we decided we could have a property such as a duplex that would either have positive cash flow or a single family home that we could renovate and sell on the market in under a year.

We decided to see what was available and in what price range.

A single family home was available at well under market value that will allow us to turn the house around for a profit. However, if the market is slow we can also choose to rent.

KNOW YOUR REAL ESTATE INVESTMENT MARKET

We live in Pasadena, California yet we're investing in Western Pennsylvania. I know other Southern Californians who are investing in Houston, Nashville or cities in Florida, North Carolina, South Carolina, Idaho . . . all places other than Southern California.

Get to know a market before you decide to invest in it. This is part of your due diligence.

Here are some pointers to know:

• The Local Economy


• Property Tax Rates


• Crime Rates for a City and Neighborhood


• Rent Control, if any


• Unemployment and future projections


• What Purchase Prices are Available?

Here are reasons my wife and I chose Latrobe, PA:

1. My family lives near there. My sister is a real estate agent and she knows the local market.

Prices for starter homes are $100,000 or less meaning I have the capital to back my investment.

The local economy seems okay from what I hear:

Latrobe Hospital is close to my investment property.

The brewery where Rolling Rock was once brewed is operating again, brewing Samuel Adams.

The Westmoreland County airport has two flights a day to Detroit via Northwest Airlines partner airline Compass Air.

St. Vincent College is growing.

The local schools have a good reputation.

In my next post, I'll write about

ORGANIZING YOUR TEAM

.