Just yesterday I interviewed a local bank manager (the branch manager for one of the largest banking and financial services companies in the United States). To help supplement his meager income he is buying distressed houses and duplexes that are selling “dirt cheap” in areas where property taxes are lower and vacancies are fewer. Using his knowledge and connection within the world of banking, he mapped out a way to buy one property at a time, fill them with residents, and then leverage these properties to buy more.
“It takes money to make money” the adage goes. So do as I did, and become familiar with the latest banking and financing strategies. Talk to bankers and loan officers so you know the latest “tricks of the trade,” and make sure you speak their language so you can gain credibility in their eyes. Be aware of all the latest tax advantages of owning residential rental property. Take a look at the IRS (Internal Revenue Service) site that goes into all the tax laws and incentives. One of the best places to start this search is at the IRS index page. Everything you’ll need to know is found there, from depreciation to the rules concerning personal use of a rental unit. It even gives many useful ideas on how to find tax help and where to locate low-income taxpayer clinics.
Know the reasons why now is the best time to own residential rental income property. This isn’t a cliché, but an actual fact. If you can get in front of groups of potential rental income investors (service clubs, investment clubs, and fraternal organizations) you’ll need to know the reasons and be able to discuss why potential investors shouldn’t delay by hoping for better times.
These are the “better times”, when interest rates are their historical lowest and the number of people needing rental housing is growing exponentially with each passing year. As one publication stated it, “However, in real estate, the right time, the most advantageous time, is always the present. Real estate investing is not like stock market investing. It is not a game of chance where the investor must speculate whether it is the right time to get in or out of the market. “In fact, the only unprofitable prudent Multi-Family/Residential Income Property investments made in the last fifty years, even during times of severe economic hardship, were the ones that never closed escrow.”
“The truth is that profitable real estate investments have little to do with the economic climate at the time of the purchase. Many investors are afraid to close on the first transaction because they want the economy to turn around first. They want everything to be perfect before jumping in. “This is impractical and unreasonable. Successful real estate investing requires the investor to be informed, disciplined and ready to evaluate the current and future profitability of a property.
“Waiting for the “right time” to buy does nothing more than delay success. Prosperity comes as one takes action, not when one sits and waits.” Read the rest of that article and become more familiar with how to motivate investors to take action by studying web sites like http://www.yourincomeproperty.com/the-university/residential-income-property-investing/. Sites like this one can help you learn how to form real estate investor syndicates. More specific information on that topic can be found at http://www.towardswealth.com/node/285. One of the best ways to create more clients for your property management business is to create them and mentor them. If you’re willing to try you’ll see what I mean and you’ll learn so much in the process.