Changes in the real estate market create new niches and investment strategies. One must be able to work well with the changes as this is one area of investing that is constantly changing and updating. If you are new at real estate investing, you should begin working with a mentor and complete some transactions with a partner to reduce your financial and liability risk. A mentor will help you to avoid the common mistakes made by many real estate investors. Begin to educate yourself; do some research on the internet, attend seminars and join a real estate investing association.



How do you choose a real estate partner or mentor?

Meet as many people as you can; network with and learn from others who have been successful in real estate investing. As you get to know people, you will find someone who you will be able to work well with. Look for someone who shares your goals and interests, for example, if you're very conservative, then you will not want to try working with someone who takes great risks. Remember, you are looking for a mentor as well as a partner. A lot of experienced real estate investors like to work with partners; many are looking for new investors to mentor.

Of course you're looking for a partnership with someone who can be trusted and one who is successful. But there is so much more to real estate investing than just knowing the investors. There are many people you need to know, including investors, realtors, brokers, builders, property managers, home inspectors, title companies, lenders and insurance providers. A successful investor already has these resources in place.

An experienced mentor or real estate partner will know how to analyze a deal to structure it for success. He will be able to show you deals he has worked on in the past; he should be able to show consistent profits, using a variety of exit strategies. Some deals are very profitable using short term transactions like wholesaling, where you buy the property very cheap and sell it quickly for a profit. Others are better when held for a time, for cash flow, as with a land contract or lease option. Ask the person you are considering working with if they have experience with seller financing as this is becoming the way to invest in today's market.

What are you looking for in a real estate partnership?

Find a good mentor and discuss the possibility of a partnership. Be sure to discuss issues like your degree of involvement in management, the amount of your investment and your responsibilities. Are you looking for a partnership where you simply invest money and the partner does the work? Are you looking at commercial, residential, vacation resorts or any certain type of property to invest in? Do you want to hold property for cash flow or is wholesaling your preference? Maybe there is a new niche in the market that you are interested in.

You are no-doubt thinking about financial gain; you must make a good profit form the partnership, no matter what type of transactions you're working or what your degree of involvement is. Does the anticipated profit match the degree of risk in the deal? How safe is the investment?

Be sure to discuss liability exposure and how your will protect your personal assets. How is the partnership to be set up? Some investors recommend that each real estate transaction be conducted using a different limited liability company.

A good mentor will make sure you understand all the important issues before you begin investing. He will explain how the partnership will be set up, what your financial investment will be and your degree of involvement. He will also cover the profit split and explain the financial risks and liability risk of each deal.

To the average person, real estate is a shaky market and one should think twice about investing in property now. The experienced real estate investor sees things in a much more positive light. There is a very high supply of bank-owned real estate, known as REO property, foreclosed homes, pre-foreclosed homes, motivated sellers and much more. The demand for these homes is relatively very low; therefore, real estate values are down and houses can be bought cheap. According to simple economics, the laws of supply and demand, this is a great time to begin investing in real estate.

Join a real estate investors association and meet real estate investors and property managers. See what everyone is doing and if it is working for them. Decide what you think will work for you and meet the people who have been successful doing it. If you do what the successful people are doing and begin working with a mentor, you will be on your way to financial success in real estate investing.