If you are considering any type of real estate investment, you will definitely need a professional on your side. Fortunately there are a number of consultants out there that can help. The real estate investment market can definitely be confusing, especially if you are new to the scene, so it will certainly be in your best interest to choose a real estate investment consultant to help you maneuver the course. Real estate can certainly be a great investment opportunity, but one wrong move and you can lose it all. This is why you need an expert real estate investment consultant on your side to help.
Working with a Credible Company
One of the things that you want to be sure of when looking for a new consultant is that they work for a company that is credible. There are generally a few ways that you can find this out. One way is to simply go right to the source and ask them how they can prove their standing and credibility. You can also take a look at their credibility by researching with organizations like the Better Business Bureau. Simply find the office in their area and see how they are rated. A great place to start is to contact your local property management companies, these companies manage properties for real-estate investors and are not only familiar with income properties, but are excellent resources. In inqury to them suggesting that you are a real-estate investor looking for a property management company and their services is the way to start the converstation. Then ask them for references, what other real estate investment companies use them. Also ask them who they see is their biggest competitor and what makes them stand out against their competition.
Working with an Experienced Consultant
Even if you find a credible company, you will certainly want to make sure that you are working with a consultant at that company who is experienced. You may find that there are consultants at a company that have a few months experience and some that have decades of experience. Though a new consultant will certainly need to get experience in the business, does it have to be with you? The truth is, you will want to work with the most knowledgeable and experienced person available for the best results.
Types of Real Estate Investment companies and advisors
In the most basic terms real-estate investment companies and their consultants fall into two camps; the equity speculators and the investment income investors. One is not better than the other, but they will evaluate real-estate investment completely different.
The equity speculators will look for distress properties, undervalued properties, or properties with high equity growth probabilities. They can flip properties in months or hold onto them for years. However, their primary goal is to generate their gains from appreciation. This group of investor type most likely resembles stock investors as they both look for undervalued assets and are speculating on appreciation. Gains can be huge, but they also take on considerable risks that include liquidity and sometimes hefty upfront cost to build, fix, or update properties readying them for sale.
The income investors are usually looking for multi-unit dwelings, office buildings, duplexes, apartments. They value these properties based on yield, how much rent versus their investment. They usually are in the investment for the long haul and base their investments on rates of return and use fix income financial products as compareables, like treasury bonds or current interest rates. These types of investor are more akin to bond investors in the market. They usually will never see big gains, but rely on a steady stream of income, the upfront costs are usually lower because they don’t’ have the added costs to build, fix, or update properties.
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Aligning a consulting team of professionals including but not limited to real estate agents, CPAs, attorneys, financial advisors and lenders can be the key to your winning real estate experience. Whether its forming LLCs to bring smaller investors together to capitalize on synergistic opportunities or working with a professional that intimately knows the market can dramatically affect the bottom. For example, having expert guidance to not over-improve a fix and flip can two or three-fold profits and reduce marketing time. Having the tax advice to execute an exchange as opposed to a sale may avoid a taxable event today keeping liquid cash in play for your next venture. The team concept take a holistic view of your fincial goals allowing for the analysis of both liability and assets while viewing real estate as an additional asset class in your overall wealth building strategy.
Again, one is not better than another, but it is important that you align yourself with a company and adviser that understands your investment goals and objectivies.
Choose a Consultant You Can Trust
Finally, you will want to make sure that you are working with a consultant that you can trust. Trust is going to be extremely important in this type of situation because you are going to be relying on this person to make decisions with your money. This isn’t something that you want to haphazardly allow to happen. Try to establish a relationship with this person and trust your instinct on whether or not you can trust them with your money.
Or If you are looking to add a valuable, trusted consultant to your real estate investment team and want creative solutions to expand your opportunities, contact Capital Solution Services.