What does your future look like? Do you dream of retiring early? Spending more time with your family and friends rather than at a 9-to-5 job? Traveling the world? Colorado Springs real estate investing can be your key to financial freedom, and the team behind the Real Estate Financial Planner™ is here to help. We offer countless resources and tools to help set you up for success. Ready to get started? Read on for our beginners’ guide to Colorado Springs real estate investing.
Choose Your Goal
The first step you need to take is determining why you want to jump into the world of real estate investing (REI) and what you want to get out of it. What do you believe REI could help you achieve? We already mentioned a few possibilities, but we encourage you to find your own! Real estate investing isn’t always easy. Connecting with your “why” and feeling passionate about your future through REI is key to motivating you through long hours, tough deals, and mistakes. (Although we work hard to keep you from making any of the latter!)
Now put a number on it. If you want to retire early, what does that mean to you? What does your investment portfolio and your bank account have to look like before you feel comfortable making that leap? You need a concrete end goal not only so you have a clear idea of what you’re moving toward, but also so you can track your progress along the way.
Looking for a little more guidance? We can help. Check out more tips on how to build an investment plan that works for you.
Choose Your Investment Strategy
You know why you want to try your hand at real estate investing. The next step is figuring out how you’re going to get there. Real estate investment strategies are as diverse as the people who pursue them, and there are quite a few options and approaches for you to consider.
The Real Estate Financial Planner™ (REFP) is specifically built for three kinds of real estate investors: buy-and-hold investors, Nomads™, and house hackers. Learn a little more about these beginner-friendly strategies below to find out what fits you best!
Buy-and-hold investing is a long-term strategy. You may not make fast, short-term capital gains, but you can benefit from a resilient, lower risk approach. These types of investors buy a property and hold onto it for about five to 10 years to benefit from things like appreciation and tax benefits.
Are you interested in the advantages of long-term investing and the potential for a much lower interest rate on your financing? Check out the Nomad™ strategy. Nomads are buy-and-hold investors who live in each property they acquire for a period of time. Once they fulfill their lender’s requirements, they can buy a new property to move into and rent out the old. (We think it’s the best investment strategy of all time. Just saying.)
If you’re a little nervous about the potential financial burden of real estate investing, you might feel more comfortable with house hacking. House hackers utilize the Nomad™ strategy with one difference — they often rent out part of the property they are living in. This can mean roommates in a multi-bedroom single-family home, or it can mean collecting rent from your neighbors on the other side of your duplex. Check out our page on house hacking to learn more about this strategy and how it stacks up against Nomad™.
Learn the Ropes
You have a goal. You have a plan. Now, how do you make it a reality? There is still a lot to learn about Colorado Springs real estate investing, but lucky for you, you’re already in the right place. The Real Estate Financial Planner™ site has hundreds of real estate investing classes and guides for you to learn from, along with tools like the REFP software, The World’s Greatest Deal Analysis Spreadsheet™, books, and more — all available for free! You can get our tips on everything from finding the right real estate agent to effectively managing your property manager.
What You’ll Need
Next, it’s time to get your ducks in a row so you can start your search for the perfect investment property. Good planning in these early stages can help speed up the rest of the process, and it can make you especially competitive when it comes time to close the deal.
First, you need to make sure you can afford to take the next step. Do a quick financial check-up so you know where you stand. You should have firm numbers for what you can afford for a down payment, an initial understanding of what kind of loans you might qualify for, and more.
Keep in mind, one of the advantages of real estate investment is that you can use the profits from one property to help finance the purchase of another. There are a lot of ways to make real estate investing work for you, even if you have low net worth or little cash to spend, and our team is here to help you make it happen!
With our free online classes, you can learn about many of the financing options open to you, as well as how to find a lender that will match you with the right mortgage. Whether your first step is repairing your credit or you’re interested in utilizing hard money or private financing, we’ve got a class for you!
Real Estate Agent
You’ll need more than a few people in your corner to find success in Colorado Springs real estate investing, and one of the most important people on your team will be your real estate agent. They will help you through the whole process, from finding properties that match your goals to negotiating with the seller to guiding you through all the paperwork. Finding the right real estate agent is key, because that relationship can benefit you for years to come!
Investment Property Criteria
Do you know what kind of investment property you’re looking for? Have you written those details down? Many people new to REI say yes to the first question…and no to the second. Chances are good that if you don’t have your criteria written down, you haven’t spent enough time thinking about what you want and need. The clearer your requirements are for your first – or your next – investment property, the faster your real estate agent can help you find what you need. Here are a few questions to ask yourself:
- Are you looking for a property close to where you live, or can you afford to hire a property manager for something further away?
- What kind of tenants are you trying to attract, and what kind of property would they be attracted to?
- What kind of property will you be happy to have in your portfolio 10 years down the line?
Close the Deal
The one thing that separates successful real estate investors from the dreamers is action. You can crunch numbers, scour MLS listings, and visit countless open houses, but at the end of the day, you need to take the leap and make an offer.
The resources here can help you with that too. We have advice on how to analyze a real estate deal, how to make a strong offer, and more. We even have a class walking you through the time period between when you have a property under contract and when you finalize the sale. Take advantage of everything we have to offer here so you feel confident moving forward!
What’s next? Even with long-term real estate investment strategies, you should be looking ahead and deciding how to move forward. Are you going to move out of your home and rent it out? Is it time to look for partners for your next deal? Most importantly, what are your plans for 10, 15, or 20 more years from now? Will you still want all of these rental properties on your portfolio a few decades from now?
You don’t have to make any of these decisions on your own. The Real Estate Financial Planner™ is designed to help Nomads™, home hackers, and other buy-and-hold investors not only analyze potential investments and track the state of their finances, but also to help you look ahead and make informed decisions about the future of their portfolio. Learn more about the REFP software, and sign up for your free account today to get started!