Too young to own your own business? Not really! When it comes to building wealth, a diversified portfolio should include real estate investments. Time is definitely on your side, and the sooner you begin your investment business in life, the better. It is imperative to have the mindset of running a business from the start. Treating this activity as a business helps you remain disciplined in your profession and set aside dedicated time to perform your duties. Starting your investment business while you are young could also lead to a highly lucrative career by staying in business as an investor over your lifetime. Read on to discover five tips for young people ready to invest in Chicago real estate.
If you are young, it is difficult to realize when you may be getting in over your head. Be smart and know your limits when you feel ready to invest in Chicago real estate. Do not leap before you look carefully into the investment or overbook yourself. Make sure you know how much time you may be committing to your project. If you think you can do everything yourself, run it by an expert in that field to ensure you are not making any expensive blunders along the way that could end up costing you tens of thousands of dollars. Never purchase based on your feelings about the property alone. Have an appraisal along with a professional inspection done before you invest. Investors should never skip these steps.
It is All About Numbers
Do your homework and run the numbers before you sign on the dotted line. Make sure indeed that you are ready to invest in Chicago real estate. Real estate investing is a numbers game, and the formulas exist to assure you are making a wise investment on paper. To break even at minimum, use the top procedure for investors, the one percent rule. You will add your purchase price and any repairs, multiplying by one percent. This amount should be the base rent you collect, and your mortgage payment should be lower than this amount. Never forget that when you are buying real estate, location will remain the determining factor in both your short-term cash flow and the long-term reliable passive income for retirement, which drives investors.
Ask for Help
Often, new investors get started with the help of family or friends, who arrange for them to borrow money, enabling them to strike while the iron is hot and invest in Chicago real estate. While it is difficult to ask for help, it will be challenging at best to raise money to begin your investment venture into real estate without assistance. If the thought of asking your friends or family to back your investment has you hesitant, this is a good sign that you will take even more care to make sure your investment is sound and profitable. Gaining confidence from having others believe in you can spur you to offer the chance to invest in your properties to those outside of your inner circle.
Your debt-to-income ratio allows the lender to judge your ability to make the payments for the mortgage on the property. They compare your gross monthly income to the total of your debt payments made monthly. Your credit score will have impactful consequences, especially if these ratios are not lining up to your lender’s satisfaction. It is best to start by eliminating unnecessary debt and creating a liveable budget to begin the habit of saving early in life. The more you can save, the more you will save in interest over your lifetime, with the ability to pay in cash for all but the largest of purchases, such as investing in Chicago real estate.
Get a Partner
Much like using training wheels when you are beginning to ride a bike, working with a partner can benefit you and your new partner. You will gain buying power through the addition of their funds and knowledge through their experience. Meanwhile, you can offer your sweat equity as your contribution, doing all the hunting to find a great deal to a flipping project. You could manage the project and lend a hand during construction, enabling you to be ready to invest in Chicago real estate. Or even become the property manager for rental income property.
Wouldn’t it be nice just to pick up the phone and work with an experienced investment team? We make it easy! Chicago Home Buyers can help guide you through any hurdles you may be facing. Working with Chicago Home Buyers means you will be off to a running start with your new Chicago real estate investment business. At Chicago Home Buyers, we have professional team members from every walk of the real estate industry ready and waiting to help you succeed! Contact Chicago Home Buyers at (312) 300-2043 today.