We know investing in the real estate market can have a lot of upside to it. But it can be hard to know how to get started. Luckily, long-time agent and coach Heidi Fore is willing to share her experience in this arena with us!

Heidi has been in the business of real estate for twenty years but didn’t start investing until 2018. Her aha moment was discovering a friend from high school was selling a fourplex. If this friend could invest in real estate, why couldn’t she? Heidi purchased this fourplex and asked herself the question: how many investment properties would it take to fund the life she wanted to live? And so her investment journey began.

When it comes down to it, investing in real estate can be distilled into four key moves: pinpointing your criteria, figuring out your search, studying the market, and lead generating for opportunities. Let’s take a look at each of these steps.

1.  Pinpoint your criteria

As Heidi reminds us, a deal is more than just a good price when it comes to investment properties. A smart purchase is one that aligns with all the criteria that you’ve set. Before investing in any real estate, ask yourself the following questions and determine what answers you’re truly comfortable with:

• What expenses are associated with the property, both to operate it and as the loan payment?
• Do you need to hire a property manager or can you manage the property yourself?
• What is the property’s monthly cash flow?
• What is the minimum amount of profit you would need to earn from the property to either build up your reserves or live on?
• What is the cash-on-cash return?

Knowing the answers to all of these questions means that you will be able to identify a deal when you come across one. Don’t deviate from your criteria, even if the purchase tugs at your heartstrings. After all, you deemed your criteria important for a reason.

2.  Determine your search

Define where you’re looking to concentrate your search and what you’re looking for. First, ask yourself where you want to focus your search. Are you looking in a specific zip code, subdivision, or part of town? Confining your search to a specific area enables you to understand that area of the market on a hyper-local level. Then, decide what type of property you want to purchase, whether it be a particular type of house, a duplex, a condo, or another property type. Once you’ve set a location and a type of structure you want to focus on, you can dig into the comps in the area.

3.  Study the market

Having a particular area and type of property in mind is extremely helpful when you start to do research on what’s available in the market. Don’t make any sudden moves. Instead, use your criteria to dive into the local market data for a couple of months. This approach allows you to gain a better perspective on the economic factors influencing the area. For instance, when you identify the specific property type and location of the investment property you’re hoping to acquire, you can use similar properties in the same area as a basis for comparison. What are the current rates of comparable properties in that location? Do the math and see if what you would pay for the property and what you could earn in rental income make it a viable (and realistic) investment. By getting an idea of what the rents and other expected expenses for the property are, you’ll be able to avoid surprises and better determine if a piece of real estate fits your desired outcomes before you make the purchase.

4.  Lead generate for opportunities

Good investment opportunities don’t often land in our laps. Rather, we need to seek them out. Once you are ready to make the leap into real estate investing, make a point to schedule time in your calendar to lead generate for investment deals. There are multiple ways to be attuned to investment opportunities. Heidi suggests setting up an MLS search in alignment with your location and criteria, looking at both online and in-person auctions, and attending networking events geared toward investors where you can meet people who may be selling their investment properties.

Remember, great investment opportunities are available in any market if you take the time to determine your criteria and only seek out properties that match your needs. Which criteria matter most to you?

Inspire members, if you want to learn more, visit the Inspire dashboard to watch 4 bonus videos from Heidi that break down the investment process further.