How to Make a Profit Investing in Residential Real Estate

investing-residential-real-estate

Any investment brings risk. Like all markets, real estate can crash. Beyond financial loss, investment homes can bring other headaches, like mold in the walls and vanishing tenants. A good plan, though, can set you up for success. Make a profit in real estate by partnering with a knowledgeable lender who can help you create a plan that’s right for you.

Investing in residential real estate offers excellent rewards. It can produce a steady income, add diversity to your investments, and allow you to serve your community. In some cases, it can make you wealthy. It can even be fun!

Minnesota is a great place to be a residential real estate investor.

Don’t let the risks scare you away. Let the risks lead you to plan well.

Profit begins with a plan.

There isn’t one right way to invest in real estate. A good plan begins with answers to these questions:

“Who are you?” and “What are your goals?”

Ultimately, only you can answer these questions, but others can help. If you’re new to real estate investing, it’s wise to get advice.

Who can help you? Here are two options that probably come to mind.

Talk to people you know

You may first think of friends or family members who own investment homes. Maybe their success is what initially sparked your interest in residential real estate. These people may offer you help and good advice. They may even provide great advice and help you think through every key aspect of your plan. They know you, so they may be in an excellent position to help you define goals that fit you.

If you don’t know many people who own investment homes, you can always start meeting them. Networking with other real estate investors can be a great way to learn and to hear about opportunities. One efficient way to meet other investors and real estate professionals is through your banker. Flagship Bank specializes in Minnesota investment real estate. We can introduce you to experienced people in our network who can help you put together an effective investment plan.

People you know well and investors you meet can help you. Remember, though, that your friends may not always be available right when you need them. Also, what’s worked well for a friend may not be the right strategy for you.

Consult written sources

Internet articles or books on investing can also help you learn about residential real estate. Most likely, any new real estate investor will use written sources for guidance to some degree. If you’re a do-it-yourselfer, figuring things out on your own using these sources probably sounds appealing.

The internet, of course, offers resources that can give you great guidance. It also offers many sources of bad advice. If you’re new to investing in residential real estate, it’s not always easy to tell the difference. Even good advice may not be the advice best suited to your particular needs.

Written sources offer a wealth of information and tips, but using that information to create your custom plan can still be a challenge.

A knowledgeable, creative partner

Did your bank leap to mind when you thought about who could help you plan well? Maybe not. However, a knowledgeable, creative lender can be a crucial part of developing a customized plan, especially when you’re new to investing in residential real estate.

Your lender might even be the best person to help you answer those two central questions: “Who are you?” and “What are your goals?”

Here’s why:

First, a loan can be part of a relationship.

You may think that all your bank will provide is a loan on residential rental property. Often, that’s the case, especially with larger national banks. Your lender can be much more than that, though. Take the time to find a bank that wants to build a relationship with you.

Lenders focused on personalized service know that getting to know you is the key to doing their job well. They know the right questions to ask you because they’ve worked closely with a wide variety of real estate investors. This wealth of experience allows them to help you better understand yourself and your needs as an investor.

A lender focused on relationships will not only help you plan but will also stick with you. They’ll be available, whether you’re getting ready to expand your real estate holdings or preparing to exit them.

Second, a lender can provide market insight.

Lenders who specialize in loans on residential rental property should know the local real estate market. They can discuss investment options with you and help you clarify your goals.

If you’re a new real estate investor, your lender can be the knowledgeable consultant you need. Your lender can help you know what to expect and avoid unnecessary and costly mistakes. This way, you can give yourself the best chance for success.

Third, a lender can offer customized, creative financing options.

Can a banker be creative? It may sound odd, but yes. When a lender knows you and knows the local real estate market, she can create personalized financial solutions. Large, commoditized banks can’t do this. What’s the loan that will be right for you? A lender focused on relationships knows there’s not a one-size-fits-all strategy. In fact, you won’t necessarily even be limited to a set number of standard loan products.

You won’t have a profitable investment plan without smart financing.

A plan that fits you

Make your real estate investments profitable and satisfying by planning well. Create the right plan by finding reliable resources and partners, including a lender who takes your personal needs seriously. Start today by researching banks who see lending as relationship building, not just transaction processing.

Flagship Bank knows the Minnesota real estate market and its wealth of opportunities. At Flagship, we also know our customers and work to help them succeed. That’s why we can provide creative approaches that fit you and your unique goals. We’re here to invest in you.


Call us for a free consultation. We’d love to hear your story.

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