Theresa Bradley-Banta Real Estate Consultancy in Denver, Colorado, USA won a Gold Stevie® Award in the website awards categories of The 2013 American Business Awards, the U.S.A.’s top business awards program. The company also won a Bronze Stevie® for Company of the Year-Real Estate; and Theresa won the Bronze for Executive of the Year-Real Estate. (Entries are now being accepted to The 2014 American Business Awards - get your entry kit here.) With the rallying real estate market, Theresa provides some savvy tips on how to invest wisely.
“I started investing in real estate in 2004, largely by accident,” Theresa told us. “Through my work as a business coach, I realized that I could buy a property, rent it out, and, through the income received, upgrade to a far more beautiful home/office space. I not only made my money back—and then some—but I also had the home and office of my dreams.”
Theresa was hooked. Since then, investing in real estate has become her life’s passion and her main source of income. “It’s really as a result of my passion that I chose to become an educator and consultant,” she told us. Her clients are individuals who want to invest, or are already investing, in real estate-from beginners to pros with million dollar investments.
Over the years, Theresa has seen that certain rules for real estate investment do not change. “Abide by them and income will follow,” she promises. Here are Theresa’s rules:
Indeed it does. If you can afford a coach or consultant, allow yourself that luxury. You will save a lot of time, energy, and money in the long run. As an educator, I’ve found it is not unusual for a client to sign on with the belief that real estate requires little more than the simple desire to get rich. It takes a lot more than that, however!
It’s A Job
Sorry, folks, but investing in real estate is a job. If you have the time and energy for it, great. If not, I recommend you walk away. I occasionally advise potential clients to do just that, which is why a consultant can help big-time to prevent you from losing your shirt—or at least your day job.
The Money Factor
Another myth is that you need to have a lot of money to invest in real estate. You don’t. You just need what I call a “good deal.” If you have that, the money is there! So what is a good deal? It’s a property that you just know is perfect-or close to it. In other words, when those additional partners you will need to fund the deal hear about it, they will jump at it.
For example, I found a wonderful 29-unit apartment building (a multifamily dwelling) but I needed investors. I simply chose to ask my brother-in-law; then, lo and behold, two friends of his—total strangers to me—stepped in. Both loved the deal. Not only that, one was a CPA and the other an attorney, so they were able to provide both financial and legal advice. The trick to finding those investors? Just ask! Your next investor might be the person standing next to you.
The Starting Point
Many first-time investors like to begin with residential real estate. This means investing in a residential property other than your own home. I have a neighbor here in Denver who did just that several years ago, and who is now reaping millions. My own biggest triumph was my first investment property: I bought it; renovated it; and sold it. Real estate almost always appreciates, but it’s the first purchase that—if you do it right—can change your psychology (think confidence!) and allow you to build a portfolio that reaps your own millions.
If you’ve never invested before, feel free to begin the way I did by simply driving around and looking for properties I liked. Picture yourself owning it. Once you set that inner intention of ownership, you are on your way!
Networking is crucial to what I call the Research Phase. Start by networking with professionals who know what you need to know: real estate agents/brokers; property managers in the markets you like; even contractors familiar with the type of property you like. In fact, any individuals who know the area you are reviewing from the bottom up.
Do Your Research
Do your research due diligence by going online to find the best resources. There are two blog posts available on my website that between them list some 15 sources for market research, including market data, demographics, and key articles.
Know The Real Numbers
Make sure you know the numbers. A mistake I see investors make most often—including the pros—is that they go with the proforma numbers given to them by agents or owners rather than having an expert go over them. You must have an experienced mentor or real estate investor on tap to help you with this. It may cost you some money (although some may do it for free), but this is something you have to do or you will make costly mistakes.
Invest In Apartment Buildings
While many beginners choose to start with a single-family residential property, as a consultant I sometimes recommend the next level up: invest in multifamily dwellings, or even apartment buildings. Investing in an apartment building is a logical first step. Advantages include cash flow from rental income, tax benefits, and property appreciation. That’s why I wrote a book last year entitled Invest In Apartment Buildings: Profit Without The Pitfalls.
The Over-Renovation Trap
Be sure to take a good look at the tenant base when researching a multifamily dwelling in which to invest. Where I so often see people go wrong—including the pros—is that the first thing they do on completing their purchase is to over-renovate the property. Before any purchase, take a simple look around and be realistic. DO NOT FALL IN LOVE WITH A PROPERTY! Like any relationship, the chances that it’s going to change because you want it to are not high. If there are beat-up cars lingering in the parking lot, it is not a given that you will suddenly attract a bigger-spending tenant base. Or maybe the building is in a neighborhood that, no matter what you do, will never attract the tenants you’re after.
The Landlord Trap
For me, being a landlord is a joy. It’s a lot of work, but I love it. If you don’t want to be a landlord—and even having a property manager means overseeing the manager—this is not the field for you. I love being a landlord, which to me means the pure joy of providing a beautiful, well-managed space that my tenants can call home. What a gift that is to give!
Have A Great Team
Make sure you have an A-plus team around you, no matter the cost. These include contractors, property managers (if you are not choosing to manage the property yourself), financial experts, etc. The better your team, the better you will do.
I’m ending where I began, because it’s crucial: Make sure you have someone on hand to educate you. A client of mine initially didn’t quite have the confidence to pull off a deal, but through our weekly sessions he now does, and he has just successfully invested in a multifamily property. It’s the confidence that counts!
For more information on investing, resources, and articles, visit www.theresabradleybanta.com. Be sure to read Theresa’s informative blog.
About Theresa Bradley-Banta
Theresa Bradley-Banta, founder and CEO of Theresa Bradley-Banta Real Estate Consultancy, is an award-winning consultant, published author, and a sought-after speaker on reality-based strategies for buying, owning, and operating multifamily investment properties. She specializes in helping clients become ever more knowledgeable about the art of real estate investing. The TBBREC client base runs from beginners to professional investors with millions in investment income.
Theresa Bradley-Banta has been featured in The Equifax Finance Blog, on the radio show Chat With Women, in Scotsman Guide, on The Lucy Ann Lance Show, in The Fordyce Letter, and in AOL’s Daily Finance, among others.