First-time real estate investors have their plates full. It can feel overwhelming to navigate the real estate investment world while still wanting to make lofty returns on your income-producing property. Just know that with time, research, experience, and help from skilled professionals, you can grow your envisioned real estate investment portfolio, and have fun doing it..
With over 100 years of combined experience in hard money lending for Florida real estate investment projects, Community Capital knows what successful investments look like. We want you to know too.
Regardless if you’re taking on a major fix-and-flip project, dipping your toe into the rental pool with single or multi-family units, or staying on the retail property path, working with Community Capital to fund your investment gives you the best chance for success and growth by supplying quick, reliable hard money real estate loans. Working with a local hard money lender who is deeply committed to Florida’s growth is crucial for securing funding that fits your needs, loan budget, and timeline.
Whether you’ve already invested in your first property, are interested in a Florida real estate project, or are curious about starting your real estate investment journey career, make sure you’re maximizing your time, energy, and money by following these 6 must-know tips for first-time real estate investors.
1. Be Selective About Location
Florida is booming. The real estate market is hotter than ever with rentals, retail spaces, and investment properties in high demand. With a business-friendly economy, countless recreational activities, white-sand beaches, and plenty of sunshine warming the coastline for miles, it’s no wonder why people and businesses continue to relocate here on a daily basis. Florida also has countless communities and endless options to consider when investing in real estate for the first time.
When making a real estate investment in Florida that you intend to keep or sell down the road, location is crucial. Get to know the areas you’re interested in, including the counties, cities, and neighborhoods as they can have a huge impact on your investment value. County guidelines, local taxes, and neighborhood fees are important costs to keep in mind.
Working with a Florida-based hard money lender who knows the market intimately and has deep-connections to the state can help when deciding on the exact location for your investment goals.
2. Get Clear on Numbers
Real estate investing is a numbers game with each investor rightfully wanting to see their properties grow and generate income for years to come. Before you jump in blindly and invest in a property just hoping to make a profit, get clear on the important numbers needed to ensure success, such as:
- Overall Profitability
- Rate of Return (Capitalization Rate)
- Rehab Costs
- Length of Loan Terms
- Amount of Loan
- Labor Costs
In order to keep your costs down and earn the highest return possible – and keep growing your real estate investment portfolio – it’s crucial to become extremely clear about the numbers you’re working with.
3. Start with Smaller Investments First
There’s no shame in starting small and thinking big. In fact, investing in a low-risk property first allows you the chance to learn, make mistakes on a smaller scale, adjust accordingly, and grow your knowledge-base and connections to avoid costly issues in the future.
Many first-time real estate investors feel encouraged and excited to jump into the game, but like any new career or skill, there’s a learning curve. Before jumping in head first, start with smaller investments so you get the hang of property investing, learn the market, and understand management before acquiring various properties or working on larger projects.
4. Work with Partners and Mentors Who Know The Market
Experience and insider knowledge are priceless when it comes to maximizing your real estate investments. Having a team that knows the industry and real estate market is crucial when making quick decisions at sizable price points. Not only does our experienced team of underwriters work their hardest to secure the best loan for you, but they also provide insight that only Florida experts have.
Start on the right foot by working with local partners and long standing industry experts who are immersed in the market both in work and in life.The Community Capital team is comprised of experts and experienced, well-connected lenders who earned their educations, have grown their careers, and started their families right here in Florida.
5. Create your Systems Early
Effective businesses run on systems that work. Real estate investment requires a similar process and successful real estate investment projects require a system. Be clear about the processes that currently exist and the systems that work for your specific industry or investment property. If they don’t exist, you’ll need to create them. In real estate investment, important systems to consider are:
- Funding and Lending
- Bookkeeping and Accounting
- Legal and Administrative
- Marketing and Advertising
- PR & Communications
- Customer Relationship Management
- Property Management
- Lead Generation and Follow-Up
- Advisory or Consulting Services
Because you followed step #2 and are clear on your numbers, you should know your budget for introducing these systems and any premium services that will launch your business forward. The point of any process is to streamline your time and effort in order to make the best use of your money, and so you can scale your strategy and recreate success over and over. Regardless of which systems and services you choose to employ, make sure they’re helping and not hurting your business.
6. Adopt A Long-Term Mindset
Even if you intend for real estate to be your part-time income or for a one-time project, adopt a long-term mindset for each investment property. Though real estate is often referred to as a “passive investment,” this industry is nothing but passive. In fact, access to information and insight, quick-decision making, and deep-connections matter most, because in real estate investment it’s the fast fish that eats the slow fish.
Sure, it may take time for real estate properties or construction projects to become profitable, but patience and process pays off in the end. Some investors can grow frustrated if a property needs an immediate repair or any immediate work, so thinking long term and setting up systems and emergency savings will help you for years to come. Once you adopt the long-term mindset, minor setbacks in the beginning become much easier to handle with ease and efficiency.
First-time investors have a lot to think about before jumping into the Florida real estate investment pool. There’s much you can do on your own, but working with a knowledgeable, experienced, and trustworthy hard money lender like Community Capital Holdings can help when you need local knowledge or help securing major capital with a quick turnaround time. Our expertise allows for an easier process when seeking and securing hard money loans for investment real estate properties.
Funding for your first-time Florida real estate investment is just one click away. Visit ComCapHoldings.com for more information.