Investing might be a more mature way to gamble. But unlike in Vegas, you can put the odds in your favor in this game.
If you’re new to real estate investing, it’s a risky business to take on by yourself. That’s where real estate investment companies come in.
An investment company specializing in real estate can help jumpstart your new portfolio. But did you know there are now two million active real estate investment licenses? So how do you choose the right company for you?
Read on for some tips from the pros.
Tip #1: Local Real Estate Investment Companies Only
Real estate is an extremely location-specific industry. Buyers’ demographics, selling points, pricing, common policies – they all vary with geography.
You need someone who knows your area (or the area where you want to invest) to a tee.
If you want to be sure, try testing their knowledge with specific questions.
Tip #2: Decide on the Type of Investment You Want
There are many ways to invest in real estate. Knowing where you want to go will tell you what investment companies can best help you.
First, decide whether you want to go the commercial or residential route. For example, HenHouse Investments solely handles residential properties. Some companies specialize in commercial properties. This lets you choose a true expert on your investment.
In the same way, you can invest in purchased or rental properties. Both have their pros and cons, so weigh all your options.
Tip #3: Do a Thorough Background Check
You can’t be too careful — know how to spot a real estate scam… and a bad investor. Investigate the companies on your short list. This should include:
- Past or current lawsuits (whether the company is the plaintiff or defendant)
- Criminal convictions against any parties involved
- Complaints filed with the Better Business Bureau
- Online reviews
- Licensing information
- References from similar clients
- Insurance policies
You should also get proof of any stats and information they give you. For example, if they say 95% of their clients sell within one month on the market, ask for supporting data.
Even if they haven’t made these claims, real estate investment companies should have proof of their clients’ success.
Tip #4: Know the Details of Your Relationship
Every investment company is unique. Do they sell you a fixer-upper and send you on your way? Do they provide guidance throughout your investment? How hands-off or hands-on are they?
These are questions you should also ask their client references as well. Make sure the company provides the services it claims to.
You should also ask about the legal details. Do they own a property until it sells, then pay you your profit? Or do you take ownership immediately?
With any size of investment, it’s worth the cost to have a lawyer review any documents before you sign.
How to Get Started
Now you know how to verify that real estate investment companies are reputable. But how do you find out your options in the first place?
You can do it at home by getting a list of the real estate investment companies in your area. Start with a reliable online business directory and make a list. Then narrow it down with the criteria above to start raking in that cash.