In San Antonio, Texas, the demand for houses is continuously on the rise. The buying and selling of real estate properties have become a lucrative business in this state. It is not surprising, therefore, that there are also many professionals who have made, and who still want to make, a big switch in their career paths to work as real estate investors.
But what exactly is real estate investor? This term is also another designation for what is more commonly known as a real estate entrepreneur. What they do is to invest in real estate, either passively or actively. This article provides you with the gist of what it is precisely that real estate investors in San Antonio, Texas do as a job.
- Real estate investors do take part in real estate development
When real estate investors that buy in the San Antonio, TX area sees an attractive property, this property cannot immediately be considered as acceptable for resale. However, real estate investors still take a chance on these properties by purchasing the same for meager prices, as they take on the responsibility of developing these properties. After the real estate investor has improved the property, that is when they put the same house up for resale again.
This above mentioned process is also what is commonly known as active investment in real estate.
- Real estate investors work towards the appreciation of the property
In the business parlance, appreciation refers to the rise in the value of a property. When a real estate investor first purchases a property, what they have in mind is what they can do, or how long they will have to wait until the property appreciates. Real estate investors are trained in this manner, such that they know what to do with a property from the moment they first take a good look around it to make the value increase.
- Real estate investors buy property
One of the most basic tasks that a real estate investor does is that they purchase property. Without the act of buying property, they cannot go about with the responsibility that they have to accomplish. Yes, there are so many properties up for sale; some are not even limited only to houses. Here are some of the sources of real estate property that these investors purchase:
- Market listings
- Real estate agents
- Private sales
- Public auction
The process that a real estate investor has to complete when purchasing property happens in this manner:
- First, the real estate investor negotiates the price of the property that is offered to them.
- Once there is a price that is mutually agreed upon by both parties, the real estate investor then proceeds towards executing a contract of sale, with the help of a real estate lawyer.
- Apart from the contract of sale, if other documents have to be signed, prepared, and mutually agreed upon, the real estate investor completes the same as well.
In some cases, the closing of the deal is quite easy; however, in others, it can be more complicated. Hence, before you jump right into the bandwagon of becoming a real estate investor, make sure that you have already put much thought into it, and that you have done ample study and research as well.
- Real estate investors make a living out of real estate property
Just as is the case with any other job, real estate investors strive to make a living out of the buying and selling of property. Do keep in mind that a real estate entrepreneur still operates or works as a business entity with profit in mind. Therefore, these real estate investors have the expertise and the skills to filter out and select only those properties that they know have an excellent resale value.
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When you venture into this kind of occupation, you have to learn how to quickly compute in your mind how much return you will potentially earn from reselling the property. Without this skill, you might fall into the trap of buying expensive properties that have little to no chance at all of being sold again.
There are many ways to earn a profit out of the property that these investors have bought, apart from just the resale of the same. Examples of these other means include:
- Having the property rented out or leased, either as a residential or a commercial complex
- Enlisting the property in stocks and additional mutual funds, to invite other investors to put their trust in the same property as well
- Real estate investors study various financing options as well
A majority of the real estate investors do not pay for the properties that they bought in full. Often, what they pay is merely what is known as the earnest money. This earnest money is like a down payment, where, through this amount, the property is reserved for the same investor and not sold to anyone else until they finish paying for the same.
With this, a considerable part of the job of a real estate investor is to also study the various available financing options and select the best choice possible for each property that they are looking to purchase. It is also along this line that the real investor has to carefully calculate the pros and cons and other expenses that they will incur as well, such as interests payable to the financing corporation, and the like.
- Real estate investors study the best they can do with the property they purchase
Not all properties that a real estate investor purchases end up in the same manner as they have first been bought. For example, the investor may have bought a house but, later on, decides to turn it into an apartment complex. With the training and skills of the real estate investor, they are better equipped to determine what it is they can do with the property that they purchased.
With this comes another necessary trait of a real estate investor in San Antonio, which is always to have a vision. The moment that you see a property, you must already know what it is that you are going to do with the same so that it doesn’t stay a stagnant property that doesn’t get sold for many years.
Examples of visions that a real estate investor may have towards a property include:
- Buying properties that can be transformed from residential to commercial qualifications
- Buying properties that can quickly be increased in size, such as converting existing decks, sheds, and carports to more house flooring
- Buying properties with so much open space to add bedrooms, bathrooms, or an additional storage room, for example
- Real estate investors take care of risk management
As is the case with any other investment, the real estate industry is not without risks. The risks are very high, being that the investment itself and the projected returns are also high. Real estate investors have to learn how to strategize proper risk management so that they can avoid falling into this trap. Examples of risk management strategies include:
- Fraudulent sales
- Fires, floods, and other calamities during such period when the property has not yet been paid in full
- Economic shut down
- Shortness of cash, or inability to pay
Risk management is a crucial aspect of any real estate property transaction so that investors do not make the mistake of owning properties without having any recourse if these properties turn lemon.
- Real estate investors have a set of technical skills that must be learned
Real estate transactions go beyond just buying and selling. There is so much more to it; hence, the investors have to learn the trade. There are others who take the time to go to school, but there are online courses that you can take. As for basics, before you start to work as a real estate investor, be sure that you have mastered the following skills first:
- Reading and analyzing cash flow, so you can decide when your property will start gaining profit.
- Reading and analyzing current market trends in the real estate industry of San Antonio, TX.
- Studying and examining the different key players and factors that drive the real estate industry either upward or downward.
- Researching and understanding the various specific tasks that the investor has to do as regards owning a property which is not for personal use, but resale, such as property management.
- Studying and mastering excellent saving skills, so that they can keep up in the business of continually buying and reselling houses again.
As inviting as the idea may seem to you, it is still best if you take the time to first develop and hone the skills and knowledge needed before you even enter into the business of real estate. In this manner, you can avoid any costly mistakes in the future just because you lacked knowledge thereof.
- Real estate investors know how to make the most out of foreclosure properties
To others, real estate property that may be up for closure can be considered as a non-profitable property. Not everyone can see the advantages of these properties that are up for closure, but real estate investors can. Foreclosure properties are properties wherein the homeowner has defaulted in their payments. Hence, the real estate investor takes over the same, continues the fees, and then analyzes how to put it up for sale to earn a substantial profit out.
- Real estate investors build relationships with others
One of the most critical backbones of any real estate transaction is building relationships with others. It is impossible for anyone to ever succeed in the real estate industry unless they are willing to connect with others. Hence, it is imperative for you to learn to build a network.
Apart from the technical knowledge that real estate investors possess, they also have excellent character and relational skills. Real estate entrepreneurs know how to build excellent relationships so that they can form a permanent network. For example, they know how to make friendships with lending companies and banks, lawyers, real estate agents, brokers, and companies that can help them out in the success of their investment process.
Another advantage of building friendships and networks across the real estate industry is that you can learn from each other. Many others have come before you, and who have more experience than you do. Take advantage of this, therefore, by allowing yourself to learn from these other expert real estate investors as well. The best lessons you can learn are really from those who have first-hand experience in the same.
- Real estate investors practice and run a business
As you are purchasing property to resell, you can equate your act to running a business. The only difference is in the type of product you are selling, wherein you are selling more valuable, hard, and expensive assets. However, the business aspect of it is still quite the same. For example, you will have to do the following as a real estate entrepreneur:
- Create a business plan for what you want to achieve.
- Create a marketing strategy, which includes reaching out to your target clients, your advertising methods, and the like.
- Create a feasibility study to analyze if each of your houses indeed is profitable, and when you start to earn a return from the same.
- Create a SWOT analysis, to study the strengths, weaknesses, opportunities, and threats of every property that you purchase.
- Create a financial system or strategy to keep the liquidity of your cash reserves strong and fluid.
This article shows you that there is more to the world of real estate than just the buying and selling of property. There are so many technicalities that go behind every successful deal, and one of the key players of the same are the real estate investors, more commonly called real estate entrepreneurs. If you are interested in this line of work or business, be very sure first to learn all the essential skills and knowledge requirements that you would need to be successful. Being a real estate investor is not an easy job, and you must be entirely dedicated to it so that you can excel in this field, and compete against numerous other investors as well.