Mike Bjorkman is a real estate professional who comes from three generations of Santa Clarita homeowners. Over the years, he’s watched the area he grew up in evolve from a small, tight-knit community into the “on the rise” area it is currently known as.
He first began his career in real estate way back in 1991. Almost instantly, he became one of the top-ranked agents in the area. After several decades in the industry, his vision for what he could do – and why it all mattered – continued to grow considerably.
Therefore, it’s safe to say that Mike Bjorkman understands the appeal of entering real estate investing for many people. However, a lot of them just aren’t sure where to begin. They think that real estate investing is only for people who are already wealthy at the start of the process, but that certainly isn’t the case.
If you’re considering entering the world of real estate investing but aren’t sure of the best approach to maximize your efforts, there are several important things to keep in mind.
Getting Into Real Estate, One Step at a Time
Mike Bjorkman notes that one of the best ways to enter the real estate investment process for the first time involves locating rental properties for sale in your area’s emerging neighborhoods.
In this context, “emerging” means that there is already significant growth potential that hasn’t been fully realized yet. Perhaps the local school system is on the rise, which will always attract families who are looking to guarantee the best possible education for their kids. Maybe the local municipality is empowering new businesses to come into the area, eventually creating a solid array of stable, well-paying jobs.
Regardless, look for areas with these qualities and identify any rental opportunities that you can. In general, rental properties are a great way to generate enough income quickly to make sure that all of your up-front costs are covered.
Along the same lines, one of the biggest mistakes that Mike Bjorkman sees lot of people make involves putting too much money into a property for the purposes of rehabilitation – to the point where it essentially eats into any return that you might make.
If you’re planning on “flipping” a home, you need to be realistic about the maximum return on investment you’ll be able to make. You also need to do your due diligence and understand how long it will take to start making a pure profit. If you pay $100,000 for a home and put $50,000 into rehab costs, but that home only sells for $125,000, you’re not making nearly as much as you thought.
That is to say, not every home needs perfect kitchen countertops and high-end fixtures. Make sure everything is ready in a pleasing way for the new owners, yes – but don’t put more money into a home than it will ultimately be worth, or you won’t be a part of the real estate investing process for very long.