It’s Never Too Late To Invest By Jeff Riddell
Sat, May 23, 2009
It’s Never Too Late To Invest In Real Estate
By Jeff Riddell
You can start investing in real estate at any age. If you are young and want to start the conventional way by purchasing a single family house or small rental property, build a team first—relationships are everything in real estate. Find a real estate broker or agent, admit you’re a beginner, show enthusiasm, demonstrate that you have read up on real estate investing and ask him to help you find a property. You might be able to find a “fisbo” (for sale by owner) property to buy net of commission but having a real estate broker or agent looking for properties for you is the most economical approach in terms of both time and money, and they usually help you for free because sellers normally pay commissions.
Using a broker can free up your time to concentrate on other aspects of real estate investing such as negotiation, inspection and other due diligence; mortgage application, closing and tenants. Other team members should include a knowledgeable real estate attorney, CPA, title insurance/closing agent, property inspector and mortgage lender or mortgage broker. Although you may want to shop around for a mortgage, it’s a good idea to try to find a mortgage professional who will at least be your first “go to” person for all your mortgage needs. Take your team members to lunch as often as you can—it’s usually cheaper than paying hourly fees and builds stronger relationships.
If you are older and just getting started, you can take the approach I suggested above or you could take another route to adding real estate to your investment portfolio. Especially if you are already in a time consuming business or career, you could try to team up with someone who is an active real estate entrepreneur; it is amazing how many of them are looking for partners—and partners can be working partners or passive partners. If you can afford time to be active, offer to take on some work; if not, offer some money. There are people in almost every community putting together groups for real estate “deals.” Such groups are what I call private syndications. Look for those “joint venture” signs up and down the highway, but be careful who you throw in with.
Public syndications are also a way to participate in real estate with little or no work, just money. These include public REIT, private REIT, TIC, LLC and LP investments. Your source for these will ordinarily be a knowledgeable securities registered representative. Ask your financial planner—especially if he or she has been quiet about adding real estate to your portfolio—but don’t be satisfied with only public (stock market) REITs. If your financial planner doesn’t handle private REIT, TIC, LLC and LP real estate, ask for a referral to a securities registered representative who does.
Jefferson F. Riddell is a Florida Board Certified Real Estate attorney with thirty-five years of experience assisting people with a variety of residential and commercial real estate matters. U.S. 1031 Exchange Services, Inc is a 1031 exchange qualified intermediary (QI) and a member of the Federation of Exchange Accommodators (FEA). As President of U.S. 1031 Exchange services Jeff has been facilitating 1031 exchanges for more than twenty years. Jeff has been awarded the Certified Exchange Specialist (CES) certification. Jeff may be reached at 941-366-1300 or via email at jeff@us1031.com. www.us1031.com
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May 23rd, 2009 at 4:46 pm
Nice writing. You are on my RSS reader now so I can read more from you down the road.
Allen Taylor
May 23rd, 2009 at 11:35 pm
More exchange and broker state exam on real estate should be adopted. Commercial Property